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during his first tenure Fed, Kevin Wash Arriving at a central bank about to be asked to save the world. He is now back under very different circumstances, called upon to serve a notoriously mercurial president who will make important but very different demands on him.
Warsh is indeed a veteran of the Fed, having served from 2006 to 2011 during the critical period leading up to and ultimately through the global financial crisis and the central bank’s efforts to stabilize the economy. Appointed by: President George W. BushWash is one of the youngest members ever to serve on the board.
During his tenure at the Fed, Warsh played a major role in the design and implementation of emergency lending programs aimed at stabilizing credit markets. Warsh also played a key role in helping craft numerous programs aimed at rescuing the economy. One of the programs was developed separately by the Treasury Department and is called ” Troubled Asset Relief Programdeveloper Neel KashkariCurrent president of the Minneapolis Fed.
Warsh, however, emerged from that era as a Fed critic.
He warned that large-scale asset purchases and near-zero benchmark interest rates risked distorting markets and undermining long-term price stability. While supporting earlier efforts, Warsh voted against a second round of the Fed’s bond-buying program, known as quantitative easing.
Former Federal Reserve Governor Kevin Warsh attends the Spring Meetings of the International Monetary Fund (IMF) and World Bank on Friday, April 25, 2025, in Washington, DC, the United States.
Tierney L. Cross Bloomberg | Getty Images
“Central Casting”
Warsh further criticized the Fed for going too far in monetary policy stimulus after the financial crisis, arguing that this was setting the stage for further crises. In some ways, the president Donald Trump A Fed chair is being appointed who may be less willing than others to adapt to political pressures Jerome Powell.
Trump cited Warsh’s extensive background Friday morning when he announced his appointment as Fed chairman. Wash is currently a Distinguished Visiting Scholar at Stanford University.
“The most important thing is that he is ‘core casting’ and he will never let you down,” Presidential Post About the Truth Society.
Wash graduated from Stanford University, received a law degree from Harvard University, and eventually married into the Lauder cosmetics family. Before joining the Federal Reserve, he worked in investment banking at Morgan Stanley and served as special assistant to the president for economic policy in the George W. Bush administration.
While positioning himself as a defender of the Fed’s independence, Warsh also criticized the Fed’s deviation from its mission and said in an interview with CNBC last year that the Fed needed “regime change.”
Warsh expressed his misgivings about the current Fed.
“The credit deficit, in my view, lies with the current Fed officials,” he said in an interview in July. The position could give him a confrontational role in an agency where consensus-building is key to policy implementation.
Despite multiple missteps in policymaking, Chairman Powell has been largely able to maintain the Fed’s consensus. However, that situation has faltered in recent months, with the past several meetings each showing at least one or more objections.
Warsh’s appointment would mark a major shift from Powell’s pragmatic, consensus-driven approach and signal a potential tightening of the Fed’s tolerance for inflation and balance sheet expansion. He will fill the seat currently held by Stephen Millan, whose term expires on Saturday.
Milan told CNBC on Friday that he supports the option.
“Chair-elect Warsh has a long history of being an innovative and original thinker on monetary policy,” Millan said. “He has provided many very important insights over the years, and I’m excited to see all the great work he will do at the Fed.”
Can Warsh influence the Fed Board?
But if Trump thinks Warsh can easily push for a big rate cut, he could be in for a nasty surprise. Several voting members of the Federal Open Market Committee said they would not cut rates further until there was more evidence that inflation was indeed heading towards the central bank’s 2% inflation target.
Additionally, all Fed officials said in December that they expected one more rate cut in 2026 and another in 2027. Overall, this is in line with market expectations, with futures traders predicting two rate cuts this year and no rate cuts next year.
Traditionally, though, the chairman has been first among equals when it comes to voting on the FOMC, so Warsh may be able to tilt the group at least in a more dovish direction.
“We view Warsh as a pragmatist rather than an ideological hawk in the tradition of independent conservative central bankers,” Krishna Guha, head of global policy and central bank strategy at Evercore ISI, said in a note. “Because of his reputation as a hawk and his view as an independent, he is better positioned than some rivals to lead the FOMC with him on at least two, and possibly three, rate cuts this year.”
So while Warsh may prove to be an ideological ally of the administration, how that translates into action will be a key question.
“Analytically, we expect he will strongly agree with the administration’s argument that even with strong economic growth, buoyant productivity will allow for neutral or loose interest rates,” wrote Tobin Marcus, director of U.S. policy and politics at Wolff Research. “But it all depends on where the data comes from, as we expect other members of the FOMC to continue to rely on data and focus on the Fed’s workhorse models that Warsh has criticized.”
Warsh emerged from a competitive derby that included 11 candidates, a list of past and current Fed officials, top economists and a number of Wall Street investment professionals including Rick Rieder, head of BlackRock’s fixed income business. The field was whittled down to five, then four, before Wash was drafted.
Trump has made no secret of the most important criterion — a willingness to lower interest rates and keep them low. The president has expressed the importance of lowering interest rates because it can both help the moribund U.S. housing market and help lower the cost of financing the $37 trillion in U.S. debt.
Before that can happen, he must be confirmed by the Senate in a tricky political situation.
The Trump Justice Department has been investigating a massive renovation project at the Fed’s Washington, D.C., headquarters and issued a subpoena to Powell seeking information. North Carolina Republican Sen. Thom Tillis has vowed to block any Trump Fed nominations until the situation is resolved.
Once that hurdle is cleared, Warsh will face the full Senate, where Republicans still hold a majority.
“Wash’s pick is likely to have broad support — Democratic economist Jason Furman had early support — and he should be confirmed relatively easily in the Senate,” Guha said.
