President Donald Trump is expected to nominate former Federal Reserve governor Kevin Warsh as the next Fed chair, a move markets immediately treated as a directional signal on rates and a referendum on central-bank independence.
Trump told reporters on Thursday he would announce his Fed chair pick Friday morning, adding that “a lot of people think that this is somebody that could have been there a few years ago,” a remark that intensified speculation around Warsh, who was considered for the job in 2017.
On Polymarket, bets on Warsh climbed sharply, with his implied odds cited as reaching 94% on Friday, turning the Fed chair decision into a tradable probability rather than a slow-drip Washington whisper.
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Warsh would replace Jerome Powell, whom Trump himself appointed in 2018 but later criticized repeatedly for resisting pressure to cut rates more aggressively. Powell’s term as chair ends in May, while his 14-year term as a Fed governor runs until 2028, leaving open whether he remains on the board after stepping down as chair.
Warsh’s resume is heavily crisis-era: he served as a Fed governor from 2006 to 2011, spanning the global financial crisis response, and represented the Fed at the G20. He previously worked as a special assistant for economic policy from 2002 to 2006.
In the private and academic sphere, Warsh is a lecturer at Stanford Graduate School of Business and holds roles tied to UPS, Coupang, and Duquesne Family Office, the investment firm of Stanley Druckenmiller.
Policy-wise, Warsh has criticized the ultra-loose post-crisis stance, particularly the Fed’s expanded balance sheet. He has carried a “hawk” reputation historically, yet appears closer to the White House’s push for lower borrowing costs, including Trump’s December comment about Warsh: “He thinks you have to lower interest rates.”
After reports of the expected nomination, the US dollar index rose 0.4%, reflecting a knee-jerk repricing of the policy path and risk premium around the Fed’s next chapter.
Capital Economics’ Stephen Brown called Warsh “a relatively safe choice” versus other contenders, arguing his long-running hawkish views could counter fears of a “full-blown Trump stooge,” while still flagging a yield risk if Warsh’s convictions around AI, deregulation-driven inflation restraint, and a smaller Fed balance sheet push long-term bond yields higher.
The nomination fight is arriving inside a broader pressure campaign. Trump has attacked the Fed’s rate posture, contemplated firing Powell, and his Department of Justice launched a criminal investigation into Powell over Fed headquarters renovations that have gone over budget. Powell denied wrongdoing and framed the pursuit as retaliation for the Fed setting rates based on its assessment rather than presidential preference.
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