Topline
President Donald Trump on Friday announced he will nominate Kevin Warsh—a former Federal Reserve governor—as his pick to succeed Jerome Powell as the chair of the central bank.
Kevin Warsh, former governor of the US Federal Reserve, during the International Monetary Fund (IMF) and World Bank Spring meetings at the IMF headquarters in Washington, DC.
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Key Facts
Announcing the decision on Truth Social, Trump said he has “no doubt” Warsh “will go down as one of the GREAT Fed Chairmen, maybe the best.”
Trump listed various offices previously held by Warsh and added, “he is ‘central casting,’ and he will never let you down.”
Warsh was considered a contender for the job eight years ago, when Trump chose Powell, and the president said Thursday at a screening of First Lady Melania Trump’s documentary, “Melania,” “A lot of people think that this [his pick] is somebody that could’ve been there a few years ago.”
Warsh previously served on the Federal Reserve’s Board of Governors from 2006 to 2011.
How Have The Betting Markets Reacted?
Online betting markets predicted in December that National Economic Council Director Kevin Hassett was the front-runner to replace Powell as Federal Reserve chair. However, the odds began shifting in Warsh’s favor since the start of the new year. Hassett’s odds peaked at around 84% on Polymarket in December, but later ended up dropping to 1%. Since Trump’s remarks on Thursday night, both markets swung in Warsh’s favor. Trading volume for bets on the Federal Reserve Chair crossed $307 million on Polymarket and $90 million on Kalshi.
What To Watch For
Trump’s nominee will need to be confirmed by the Senate and the path for this may not be straightforward. One key GOP lawmaker, who sits on the Senate Banking Committee, Sen. Thom Tillis, R-N.C., has said he will block any Fed nominees until the U.S. Justice Department resolves its probe into Powell and the central bank’s renovation of its Washington building. Tillis reiterated his stance on Thursday, telling reporters: “The Fed noms are not going to change until the investigation and potential indictment of Chair Powell is completed…DOJ’s got to decide when I lift those holds. It gets lifted the day that case is adjudicated or withdrawn.”
Key Background
Powell’s term is set to end in May, though he could stay on the board as governor until 2028. This, however, would be a major departure from set precedent and it has not been done since the 1940s. Powell has been one of Trump’s top targets for criticism and ridicule since the president started his second term last year, disagreeing with the majority of the chair’s decisions. Trump’s Department of Justice launched an investigation into Powell, who cannot be simply fired by the president, this month over alleged false statements he made in testimony about a $2.5 billion renovation of the Federal Reserve’s headquarters, which Powell has vehemently denied. Powell responded to the federal probe with a combative statement saying: “The threat of criminal charges is a consequence of the Federal Reserve setting interest rates based on our best assessment of what will serve the public, rather than following the preferences of the president.” He added that the issue is about “whether the Fed will be able to continue to set interest rates based on evidence and economic conditions, or whether instead, monetary policy will be directed by political pressure or intimidation.” Powell has not yet confirmed if he intends to remain on the board or leave after his chairmanship ends.
Further Reading
Trump Claims US Should Pay World’s ‘LOWEST’ Interest Rates After Fed Paused Cuts (Forbes)
Why The Trump Administration’s Investigation Against Jerome Powell May Not Succeed (Forbes)
Source: https://www.forbes.com/sites/antoniopequenoiv/2026/01/30/trump-nominates-kevin-warsh-as-next-federal-reserve-chair/
