Trump nominates Kevin Warsh as Federal Reserve Chair
President Donald Trump has nominated Kevin Warsh to serve as the next Chair of the Federal Reserve, a position that will open when incumbent Jerome Powell’s term expires in May 2026. The nomination comes after an extended selection process and places Warsh, a former Federal Reserve governor and seasoned financial figure, at the centre of U.S. economic policymaking. Warsh served on the Fed’s Board of Governors from 2006 to 2011 and is widely regarded for his deep experience in monetary policy and financial markets. Analysts note that he supports lower interest rates, which could be favourable to risk assets, but he also advocates reducing the Federal Reserve’s balance sheet, a move that might temper liquidity in markets. The nomination must now go before the United States Senate for confirmation, where lawmakers will assess his suitability to lead the central bank. Markets reacted sensitively to the announcement, with stock index futures initially falling as investors evaluated the implications of his potential leadership. By Friday morning trading, Dow Jones, S&P 500 and Nasdaq futures pared earlier losses, indicating that investors were starting to absorb the news and price in expectations for the U.S. economy under Warsh’s guidance. The broader reaction in markets reflected mixed sentiment about potential changes in monetary policy direction and expectations for future interest rate adjustments. The dollar strengthened modestly while Treasury yields remained elevated as traders balanced the prospects of rate cuts with the Fed’s evolving policy stance under new leadership. Amid these developments, the nomination of Kevin Warsh marks a pivotal moment in U.S. economic governance, shaping expectations for inflation, employment, and financial stability in the year ahead.
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