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(DAILYWIRE) – President Donald Trump on Friday nominated former Federal Reserve governor Kevin M. Warsh to serve as the board’s next chairman.
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Trump’s long-awaited announcement comes after months of the president vowing to replace outgoing chairman Jerome Powell. Warsh came as a bit of a surprise, as conventional wisdom had coalesced around three candidates: National Economic Council director Kevin Hassett, BlackRock executive Rick Rieder, and Fed governor Christopher J. Waller.
In a Truth Social post, the president said that Warsh would “go down as one of the GREAT Fed Chairmen, maybe the best.” Warsh will need Senate confirmation to take his post, though with a Republican majority in the Upper Chamber, it seems likely that he will soon take the reins at the Fed.
Warsh began his career on Wall Street as an investment banker for Morgan Stanley before joining the Bush administration as an economic adviser in 2002. President George W. Bush named him to the Federal Reserve Board in 2006, where, at 35, Warsh became the youngest governor in the Fed’s history.
Warsh played a key role during the 2008 financial crisis, helping coordinate the central bank’s response. He was involved in efforts surrounding the government rescue and bailout of AIG and the emergency deal that led JPMorgan Chase to acquire Bear Stearns as markets unraveled.
After leaving the Fed in 2011, Warsh joined the board of UPS and became a distinguished visiting fellow in Economics at the Hoover Institution. Warsh met his wife, Jane Lauder, while they were undergraduates at Stanford University. Lauder is the daughter of Ronald Lauder, the heir of the Estée Lauder Companies and a close friend of President Trump. Lauder reportedly gave Trump the idea to purchase Greenland.
Warsh has gained a reputation as a fiscal hawk. “The United States is not Greece,” Warsh said in a 2010 speech. “We have the largest, most robust economy in the world. We have the deepest, most liquid financial markets. And the dollar is the world’s reserve currency, bestowing key advantages upon us. But, none of this is our birthright. It must be earned, and re-earned.”
He warned the Fed’s post-crisis stimulus could spark inflation and argued against expanding quantitative easing, pushing for a tighter monetary stance and a smaller Fed balance sheet.
He has argued that decisions over which assets the central bank buys and holds influence market pricing in ways he believes are better left to the Treasury Department. Like Treasury Secretary Scott Bessent, Warsh once worked for investor Stanley Druckenmiller, and has suggested that artificial intelligence could boost growth without reigniting inflation.
He has also drawn a firm line around the Federal Reserve’s role, stating, “The Federal Reserve is not a repair shop for broken fiscal, trade, or regulatory policies.”
Despite his reputation as a hawk, Warsh has recently argued for lower interest rates and sharply criticized Powell for moving too slowly.
“Their hesitancy to cut rates, I think, is actually quite a mark against them. It’s as if they’ve lost some of the credibility. Truth is, in economics and inflation, bygones are not bygones. The specter of the miss they made on inflation, it has stuck with them. So, one of the reasons why the president, I think, is right to be pushing the Fed publicly is we need regime change in the conduct of policy.”
Still, in December, the chief economist of Deutsche Bank said that “although Warsh has argued for lower rates recently, we do not view him as structurally dovish.”
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This article was originally published in The DailyWire.
