United States President Donald Trump has chosen Kevin Warsh to lead the U.S. Federal Reserve when current chairman Jerome Powell’s term ends 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,” Trump said in a post to Truth Social.
The appointment comes as Trump has increased attacks on Powell in recent months and the worries about the Fed’s independence have increased.
Warsh served as a Fed governor between 2006 and 2011 and was considered for chair during Trump’s first term.
He has been an outspoken Fed critic and is expected to support lower interest rates in the near term.
He even escalated his rhetoric since emerging as a contender for the top Fed job, going as far as calling for “regime change”.
"Warsh will have to convince his colleagues that rate cuts are appropriate this year, an argument that is unlikely to win unless the labour market shows renewed signs of weakening or inflationary pressures ease materially later this year," economists at Deutsche Bank wrote in a research note on Friday.
This comes as Powell has angered Trump for not lowering interest rates quickly enough.
Federal prosecutors have also opened a criminal investigation over testimony he gave to the Senate about renovations to the Fed buildings.
Warsh’s appointment still needs to be approved by the Senate, meaning it could face lengthy delays.
If confirmed for the role, he will take the helm of the Fed at an unusually tense time, as economists and Wall Street investors monitor threats to the central bank's autonomy.
Following the announcement, there was a significant crash in the gold and silver markets of 9% and 28%, respectively.
