Trump picks Kevin Warsh as new Federal Reserve chair. What to know

President Donald Trump has nominated Kevin Warsh as the next chairman of the Federal Reserve.

Trump nominated the former Federal Reserve governor on Jan. 30. If confirmed by the Senate, Warsh would succeed current Fed Chair Jerome Powell, whose term ends in May.

Powell has drawn repeated criticism from Trump over the past year for resisting calls to lower interest rates, USA TODAY reported.

In Warsh, Trump has selected a frequent critic of the Fed who favors lower interest rates but is considered a fiscal moderate, more cautious about using aggressive monetary tools. Warsh previously served on the Federal Reserve Board from 2006 to 2011.

“I have known Kevin for a long period of time, and have no doubt that he will go down as one of the GREAT Fed Chairmen, maybe the best,” Trump wrote in a Truth Social post.

“On top of everything else, he is ‘central casting,’ and he will never let you down. Congratulations Kevin!”

Here’s what else to know.

Who is Kevin Warsh?

A lawyer and a distinguished visiting fellow in economics at Stanford University’s Hoover Institution, Warsh has said he believes the president is right to press the central bank for steep interest-rate reductions, and has criticized the Fed for underestimating the inflation-busting potential of productivity growth supercharged by artificial intelligence.

Warsh is seen as a comparatively moderate figure, as one of the less radical choices and notably more cautious about deploying heavy monetary stimulus despite his preference for lower rates.

He has also called for a broad overhaul of the central bank that would slim its balance sheet and ease bank regulations.

Why has Trump been critical of Powell?

Trump has talked openly about the search for Powell’s replacement for months, USA TODAY reported.

Trump first appointed Powell as chairman of the seven-member Fed board in 2017. Former President Joe Biden nominated him to a second four-year term in 2021. Congress confirmed his reappointment in 2022.

Trump has repeatedly criticized Powell during his first year back in the White House, even threatening to fire him from the board of the independent agency, for resisting Trump’s calls to sharply lower interest rates.

He has also signaled that he wants a Fed chair who aligns with his views on rate policy, prompting concerns about potential executive branch interference in the central bank’s independence.

What does the chair of the Federal Reserve do?

The chair of the Federal Reserve serves as the nation’s most influential economic policymaker, guiding the central bank’s efforts to maintain stable prices, support maximum employment and promote a healthy financial system.

The chair leads the Board of Governors and the Federal Open Market Committee, the body responsible for setting interest rates and shaping overall monetary policy.

Their public statements and policy decisions can move financial markets, influence borrowing costs, and shape the economic outlook for households and businesses.

The chair also regularly reports to Congress, offering assessments of the economy and explaining the Fed’s actions, while overseeing the Fed’s regulatory responsibilities, including supervision of major banks and monitoring risks to the financial system.

More: How powerful is a Fed chair? What to know ahead of Trump’s nomination

Contributing: USA TODAY

Diana Leyva covers trending news and service journalism for the Tennessean. Contact her at Dleyva@gannett.com or follow her on X at @_leyvadiana

This article originally appeared on Nashville Tennessean: Who is Kevin Warsh, Donald Trump’s pick for Federal Reserve chair?