Daijiworld Media Network - Washington
Washington, Jan 30: US President Donald Trump is expected to announce his choice for the next Chair of the Federal Reserve on Friday, setting the stage for a major shift in the leadership of the US central bank. The move comes a day after Trump met at the White House with former Federal Reserve Governor Kevin Warsh, a long-time critic of the Fed who has called for a “regime change” to restore its credibility.
Speaking to reporters at the Kennedy Center on Thursday, Trump said he would make the announcement the following morning. “It’s going to be somebody that could have been there a few years ago. I think it’s going to be a very good choice. I hope so,” he said. A source later confirmed that Warsh, 55, had met the president at the White House.
During his first term, Trump had bypassed Warsh in favour of Jerome Powell, a decision he later regretted after Powell resisted calls for faster and deeper interest rate cuts. This time, Trump has made support for lower interest rates an explicit criterion for the role. Warsh, along with other reported finalists, has publicly argued that the Fed should be cutting rates more aggressively.
The nomination, which will require Senate confirmation, comes amid unprecedented efforts by Trump to exert influence over the traditionally independent central bank. These include an attempt to remove Fed Governor Lisa Cook, a matter currently before the Supreme Court, and a Department of Justice probe that Powell has described as part of a broader attempt to intimidate the Fed.
Powell’s term as Fed Chair ends in May. He has declined to say whether he will remain on the Board of Governors, where his term runs until 2028. Any decision to stay on could complicate leadership dynamics under a new chair and limit Trump’s ability to appoint another governor.
Trump’s promise of a Friday announcement marked a shift from his earlier statement that the decision would be made public next week. However, the White House schedule released late Thursday did not explicitly list an announcement, showing only an executive order signing session and a policy meeting.
Warsh’s potential nomination is expected to face intense scrutiny. Republican Senator Thom Tillis of North Carolina has warned he may block all Fed nominees until the DOJ investigation involving the central bank is resolved.
A former Fed governor from 2006 to 2011, Warsh was a key liaison to Wall Street during the 2008 financial crisis under then-chair Ben Bernanke and was known as a proponent of tighter monetary policy at the time. In recent months, however, he has backed Trump’s push for steep interest rate cuts and criticised the Fed for underestimating productivity gains driven by artificial intelligence.
With a background on Wall Street, including work managing the wealth of investor Stanley Druckenmiller, and family ties to prominent Trump supporter Ron Lauder, Warsh is expected to face questions over his independence. Though not a White House insider, he has been a confidant of Trump and a guest at his Florida estate.
Currently a lawyer and a distinguished visiting fellow in economics at Stanford University’s Hoover Institution, Warsh has advocated overhauling the Fed by shrinking its balance sheet and easing banking regulations. He argues that reducing the balance sheet would free up liquidity and allow for lower policy rates, a view not shared by the current Fed leadership.
The Federal Reserve cut rates three times in 2025 but this week kept its benchmark rate unchanged in the 3.50–3.75 per cent range, signalling no urgency to ease further. It has also paused balance sheet reduction to maintain ample banking reserves.
Other names reportedly considered for the top job include BlackRock executive Rick Rieder, Fed Governor Christopher Waller, and White House economic adviser Kevin Hassett.