President Donald Trump announced Friday that former Federal Reserve official Kevin Warsh will replace Jerome Powell as Federal Reserve chairman when Powell’s term expires in May.
“I have known Kevin for a long period of time, and have no doubt that he will go down as one of the GREAT Fed Chairmen, maybe the best,” the president said in a Truth Social post. “On top of everything else, he is ‘central casting,’ and he will never let you down.”
Trump nominated Powell to serve as Fed chairman in 2017 but has publicly berated him for years for refusing to aggressively cut interest rates.
The Trump Justice Department issued a subpoena to Powell last month over his testimony in front of the Senate Banking Committee last June.
“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,” Powell said in a statement regarding the investigation.
Warsh previously served as a member of the Fed board from 2006 to 2011. He is currently a fellow at the Hoover Institution and a lecturer at the Stanford Graduate School of Business. His nomination will require Senate confirmation.
Warsh is an advocate of cutting interest rates and last summer called for “regime change” at the Fed.
“The credibility deficit lies with the incumbents that are at the Fed, in my view,” Warsh said.
The administration considered at least eleven people for the position, including Governor Christopher Waller, BlackRock bond chief Rick Rieder, and National Economic Council director Kevin Hassett, according to a Truth Social post from the president.
Trump has emphasized that he would pick a Fed chairman who supported slashing interest rates, which currently stand at 3.5 to 3.75 percent. Trump has argued they should be cut to 1 percent.
The announcement comes one day after Trump laid into Powell on social media, calling him a “moron” for deciding to hold rates steady at a Wednesday Fed meeting.
“We should have a substantially lower rate now that even this moron admits inflation is no longer a problem or threat,” the president wrote on social media. “He is costing America Hundreds of Billions of Dollar a year in totally unnecessary and uncalled for INTEREST EXPENSE.”
Republican Senator Thom Tillis of North Carolina has said that he will oppose the confirmation of any Fed nominee until the Department of Justice ends its investigation into Powell. Tillis, who is retiring at the end of his term, said in a post on social media that Warsh was a qualified candidate but that he will continue to block his confirmation “until the DOJ’s inquiry into Chairman Powell is fully and transparently resolved.”
“The Department of Justice continues to pursue a criminal investigation into Chairman Jerome Powell based on committee testimony that no reasonable person could construe as possessing criminal intent,” Tillis wrote. “Protecting the independence of the Federal Reserve from political interference or legal intimidation is non-negotiable.”