President Donald Trump on Friday nominated Kevin Warsh to serve as the next chair of the Federal Reserve, a move that could reshape the world’s most influential central bank amid intensifying debate over interest rates and political pressure.
If confirmed by the Senate, Warsh would replace Jerome Powell when his term expires in May, returning to an institution where he previously served as a governor during and after the financial crisis.
The nomination follows months of public criticism by Trump of Powell, whom the president has repeatedly accused of keeping interest rates too high despite signs of economic strain.
Financial markets responded quickly to the announcement, signaling expectations that Warsh could favor relatively tighter policy over time.
The U.S. dollar strengthened modestly, while yields on long-term Treasury bonds edged higher.
Stocks fell about 0.5 percent, with sharper moves in commodities as gold dropped more than 5 percent and silver slid more than 13 percent.
Investors appeared to weigh Warsh’s earlier reputation as a proponent of higher rates against his more recent statements supporting rate cuts.
Warsh has criticized the Fed’s $6.6 trillion balance sheet, arguing that large-scale bond purchases enabled excessive government spending and distorted markets.
He has said inflation stems from excessive government spending and money creation rather than strong economic growth.
Despite his past opposition to prolonged low rates, Warsh has lately voiced views more aligned with Trump’s push for easier monetary policy.
The nomination has heightened concerns in Washington over the Federal Reserve’s independence.
Republican Senator Thom Tillis of North Carolina said he would oppose the nomination until a Justice Department investigation involving Powell is resolved, a stance Senate leaders said could imperil confirmation.
Democratic Senator Elizabeth Warren called the move an effort by Trump to assert control over the central bank.
Trump praised Warsh on social media, writing that he “will go down as one of the GREAT Fed Chairmen, maybe the best.”
The president later said he did not ask Warsh to commit to cutting rates, calling such a request inappropriate, while adding that Warsh favors lower borrowing costs.
If confirmed, Warsh would lead the Fed during a period of internal division, with policymakers split between inflation concerns and signs of labor market weakness.
As chair, Warsh would be only one vote on the rate-setting committee, limiting his ability to act unilaterally.
Markets and lawmakers are expected to closely scrutinize whether he can balance presidential expectations with the Fed’s long-standing independence.