:max_bytes(150000):strip_icc()/GettyImages-2211325832-97b4086b89ce44f3bb85605f2dda838d.jpg "Trump Names New Fed Chair: Kevin Warsh")
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Key Takeaways
- President Donald Trump has selected former Federal Reserve Governor Kevin Warsh as his nominee to be the next chair of the Federal Reserve after Jerome Powell’s term ends in May.
- Warsh has argued for lower interest rates, and as Fed chair, will be in a position to influence them.
President Donald Trump has selected former Federal Reserve Governor Kevin Warsh to be the next chair of the central bank.
Warsh, who served as a Fed governor between 2006 and 2011, beat out several finalists for the job, including Trump economic advisor Kevin Hassett and BlackRock executive Rick Rieder. Warsh will take over as Fed chair after Jerome Powell’s term expires in May, assuming he is confirmed by the Senate.
“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,” Trump wrote in a social media post Friday morning.
The chair of the Federal Reserve is one of the most influential jobs in the economy, responsible for leading the U.S. central bank and heading the 12-person committee that sets monetary policy. The Fed is responsible for keeping inflation low and employment high, mainly by adjusting borrowing costs via the fed funds rate.
What This Means For The Economy
If Warsh maintains his views of the economy after taking office, the central bank could be inclined to keep interest rates lower than it otherwise might. That could lead to lower borrowing costs, a hotter economy, and possibly higher inflation.
Notably, Warsh has argued for lower interest rates but was not considered the most “dovish” among the leading candidates for the job, analysts have said. The Fed trimmed the fed funds rate by three-quarters of a point last year to a range of 3.5% to 3.75%, but has resisted cutting it more because of concerns about inflation.
