🔥 “Trump’s Fed Reset”: Kevin Warsh Tapped to Replace Powell — A Rate-Cut Hawk With a Bone to Pick With the Central Bank

President Donald Trump has made his most consequential economic move yet — and it’s a familiar face with unfinished business.

On Friday, Trump nominated Kevin Warsh, former Federal Reserve governor and longtime Fed critic, to succeed Jerome Powell as chair of the U.S. central bank. The choice signals a sharp pivot toward lower interest rates, a leaner Fed balance sheet, and a wholesale rethink of how inflation is understood — and fought.

“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 declared in a Truth Social post. “He is ‘central casting,’ and he will never let you down.”

It’s a full-circle moment. Eight years ago, Trump interviewed Warsh for the same job — then passed him over for Powell, a decision Trump has openly regretted almost ever since.

This time, he didn’t hesitate.

Warsh isn’t a disruptor from the outside. He’s a veteran of the Fed’s most traumatic chapter.

Appointed by President George W. Bush, Warsh served as a Fed governor from 2006 to 2011, placing him at the heart of the 2008 financial crisis. During the meltdown, he became then–Fed Chair Ben Bernanke’s liaison to Wall Street, acting as a bridge between panicked markets and policymakers.

Before that, Warsh advised the White House as a senior economic official and worked in M&A at Morgan Stanley, giving him rare credibility across government, finance, and markets. He holds a Stanford degree in public policy (economics and statistics) and a Harvard law degree — credentials that play well in Washington and on Wall Street alike.

Trump ultimately chose Warsh over a shortlist that included Fed Governor Chris Waller, BlackRock fixed-income chief Rick Rieder, and NEC Director Kevin Hassett.

The message was clear: experience over experimentation.

Warsh’s economic philosophy aligns neatly with Trump’s priorities — and clashes directly with Powell’s legacy.

Warsh believes:

“We used to say interest rate policy is housing policy,” Warsh said last year. “But we’re in a housing recession right now. First-time homebuyers are having a hard time getting a house.”

Trump boiled it down more bluntly:
“He thinks you have to lower interest rates.”

That alone made Warsh the frontrunner.

Unlike many central bankers, Warsh has been openly critical of the institution he once served.

In a Wall Street Journal op-ed last year, he argued the Fed should “discard its forecast of stagflation” and rethink inflation entirely. He believes inflation isn’t caused by workers earning too much or the economy growing too fast — but by government overspending and excessive money creation.

He’s also sharply criticized Powell for what he calls “unwise choices,” especially the Fed’s failure to recognize how persistent post-pandemic inflation would become.

On tariffs, Warsh takes a surprisingly dovish view, arguing they should be treated as one-off price adjustments, not ongoing inflation drivers — a stance that aligns closely with the White House and an increasing number of Fed officials.

Warsh also sees AI as a deflationary force, boosting productivity and pushing prices lower — a view that sets him apart from more cautious policymakers.

Perhaps most striking is who’s cheering the nomination.

At a private New York conference in December, JPMorgan CEO Jamie Dimon said Warsh would make a “great Fed chair” — a rare and notable endorsement from one of the most influential figures in global finance.

Markets are already reading the nomination as a signal:
The era of restrictive policy may be nearing its end.

Warsh’s path isn’t obstacle-free.

He must still face confirmation hearings before the Senate Banking Committee and a full Senate vote. And politics could complicate the process.

Sen. Thom Tillis (R-NC) has warned he may block any Fed chair nominee until the Justice Department resolves its criminal investigation into Jerome Powell — a probe that continues to cast a shadow over the transition.

Still, Warsh enters the process with deep institutional credibility and bipartisan familiarity — advantages few nominees enjoy.

If confirmed, Kevin Warsh would represent more than a personnel change. He would mark a philosophical reset at the Federal Reserve:

For Trump, it’s a long-awaited correction.
For markets, it’s a potential inflection point.
And for the Fed itself, it could be the most dramatic internal shift since the financial crisis.

One thing is certain:
If Kevin Warsh takes the helm, the Powell era won’t just end — it will be repudiated.