Washington – President Donald Trump on Friday said that he would nominate Kevin Warsh to be the 17th Chair of the Board of Governors of the Federal Reserve System after Jerome Powell’s term ends in May.

“I am pleased to announce that I nominate Kevin Warsh to be the chair of the Board of Governors of the Federal Reserve System,” – wrote Trump on his social network on Friday morning. “I have known Kevin for a long time and have no doubt that he will go down in history as one of the most outstanding chairs of the Fed, perhaps the best.”

– Donald J. Trump

In a later remarks in the Oval Office, Trump additionally endorsed his candidate, noting:

“I would say that this was the ideal candidate. This was the person who best fits the requirements: the best schools, everything was flawless, the youngest person ever to hold a position at the Fed. All in one package. Looks don’t matter, but he has the right look, doesn’t he?”

– Donald J. Trump

Warsh is a conservative candidate for the Fed chair: a former Fed governor, he had previously been considered a likely candidate for the post of Treasury Secretary in Trump’s second term and as a candidate for the top Fed job during the first term. He was appointed to the Fed in 2006 at the age of 35, becoming one of the youngest figures on the influential Fed board.

Now aged 55, Warsh has recently shifted his stance on monetary policy. The former inflation hawk now advocates for lowering interest rates, according to numerous public statements over the past months, while Trump plays out a supposed show around the Fed chair decision. He has also called for a review of the central bank’s personnel.

“It’s reasonable to assume that he told the President he favors reducing interest rates today, otherwise he would not have been nominated,” wrote Samuel Tombs, chief US economist at Pantheon Macroeconomics, in commentary issued Friday. “Our instincts tell us Mr. Warsh will be more preoccupied with how history will view his record than with continuing to pander to the President.”

– Samuel Tombs

Selecting a new Fed chair is one of the most important personnel decisions any president makes – but for Trump this would have an even more consequential impact. Trump pledged to lower the cost of living, while the Fed is responsible for maintaining price stability.

Trump has criticized the Fed and Powell over the past year, accusing Powell of not cutting rates. At the start of this month Powell, of his own initiative, released a rare video address where he stated that the Trump administration had begun a criminal investigation into the Fed and its chair. In that address Powell called such actions “a precedent” for intimidating the central bank to push rates lower for the president’s benefit.

Not surprisingly, Trump is unhappy with Powell, but it’s unclear whether he has the authority to actually dismiss him. Yet in August, Trump showed a group of liberal lawmakers a letter about dismissal during a meeting in the Oval Office, according to three people familiar with the matter.

While the legal debate raged, the Trump administration was actively arguing in the Supreme Court for extending the tenure of Federal Reserve Governor Lisa Cook, whom the president said he had fired in August. The independence of the Fed became a topic of sharp debate, but conservative judges had already expressed doubts about the administration’s legal arguments during hearings.

Timeline of the Selection and Prospects

The selection for the head of the central bank ended a long campaign with a diverse slate of candidates – from MAGA loyalists like National Economic Council director Kevin Hassett to former Treasury Secretary Janet Yellen, according to Scott Bessent, the head of the Treasury under Trump who led the selection. Bessent himself was also considered for the post, but decided to stay in his current role.

Besides Warsh, the final four also included Kevin Hassett, Christopher Waller, and Rick Rieder of BlackRock.

“Christopher Waller, Rick Rieder, and others, were interviewed for the Fed position. They all would have been outstanding, and have a great and unlimited future with “TRUMP.” Such amazing talent in our Country. Thank you!”

– Donald Trump

Hassett could have been an excellent Chair, noted Trump, but he expressed willingness to stay in his current position, uttering one line: “If you can’t do better – don’t try to fix it.” Warsh is regarded as a candidate with deep experience and a stable reputation in the economic and financial communities.

The Senate Banking Committee will consider Warsh’s nomination at public hearings, after which the Senate must vote to confirm it. However the process may be complicated by the Powell-related criminal investigation, which could cast doubt on support for the nomination from some Republican senators.

“No Republican purporting to care about Fed independence should agree to move forward with this nomination until Trump drops his witch hunts of the current Chairman of the Federal Reserve and Governor Lisa Cook,”

– Senator Elizabeth Warren (Massachusetts)

The political fight around the Fed could affect trust in the central bank’s independence. Predictably, senators will question Warsh about his views on rates and any promises he may have been given earlier in connection with the president’s policy.

According to experts, the tight schedule could also affect his family: his father-in-law Ronald Lauder – a mega-donor to Republicans. Warsh, in his overseas biography, is described as a former economist in the White House under the George W. Bush administration. He is currently doing analysis at the Hoover Institution, a conservative think tank affiliated with Stanford University.

While Trump pursued aggressive rate cuts to support growth, many economists believe Warsh once held a moderate course on inflation and justified restraint in stimulus policy.

For example, in April 2009 during the crisis, when unemployment rose, Warsh expressed concerns about inflation risks:

“I continue to be more concerned about the risks of rising inflation than the risks of its decline,” said Warsh during a Fed meeting, according to minutes later released.

– Kevin Warsh

Also his resignation from the Fed in 2011 was explained by disagreements over crisis-management tools and criticism of quantitative easing, which, in his view, could push inflation above the Fed’s mandate.

In the context of current events, experts consider Warsh an experienced and serious player with a strong resume. As a young Fed governor he played a significant role in the crisis period alongside then-Chair Ben Bernanke and Timothy Geithner, who later became Treasury Secretary. He argued that he could act independently of political pressure: he left the central bank over disagreements about crisis-management tools and criticized quantitative easing for the risk of inflation and expanded powers of the Fed.

“During the defining crisis of our time – the Great Financial Crisis – Kevin Warsh stressed inflation as the primary risk when banks were hit, credit markets froze, and the economy struggled to stay afloat,” analysts emphasize in reviews that appeared later.