Trump has nominated Warsh to be the new head of the Federal Reserve. What you need to know about a candidate

US President Donald Trump has nominated Kevin Warsh, a former member of the Board of Governors of the Federal Reserve System, to head the organization. Now his choice must be approved by the Senate. Warsh is known as a consistent critic of the Fed's policy, although he himself was on the board of directors and was its youngest member. What a candidate for the post of head of the American central bank needs to know is in the Izvestia article.

Change of the head of the Fed

• The Fed serves as the central bank and is responsible for the sustainability of the U.S. financial system and economy. In particular, its tasks include regulating money circulation, controlling inflation, maintaining employment and ensuring stable operation of the banking sector.

• The Fed is formally independent of the executive branch, so that its decisions are made based on long-term economic indicators. The head of the regulator is appointed by the president, but after confirmation in the Senate, the members of the board of governors and the chairman do not report directly to the White House. This, in theory, allows the Fed to pursue policies that may be unpopular in the short term, such as raising interest rates to combat inflation, even if this slows economic growth or worsens financial markets.

• The dispute between Donald Trump and the Federal Reserve System arose due to a different understanding of economic policy priorities. The president has repeatedly sharply criticized the current head of Jerome Powell, whose term expires in May 2026, for a cautious interest rate policy and a refusal to reduce the rate more significantly, which now reaches 3.75% per annum.

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The case is related to the costs of repairing the regulator's headquarters

• Trump has consistently pushed for lower interest rates, believing that cheap money boosts economic growth, supports the stock market, facilitates government debt servicing, and makes American exports more competitive. The Fed proceeded from the need to contain inflationary risks and prevent overheating of the economy.

• An additional source of tension was the Fed's position on its own autonomy. The regulator continued to act within its mandate, focusing not on the public demands of the White House. This led to personal criticism of Jerome Powell.

• Against this background, at the beginning of 2026, a criminal investigation was initiated against Powell related to the allegedly expensive reconstruction of the Fed headquarters (we wrote more about this case and how the change of the head of the Fed could affect global markets here). He and the former heads of the regulator regarded what was happening as an attempt at political pressure and a threat to the independence of the central bank.

Warsh's views

Besides Warsh, Kevin Hassett, head of the National Economic Council, Christopher Waller, member of the Board of Governors of the Federal Reserve, and Rick Reeder, a top BlackRock executive, were also on the list of candidates for the role of Fed chairman.

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Raw materials should rise in price, which will favorably affect the inflow of foreign currency and the plans of the Russian Central Bank to lower the rate.

Kevin Warsh advocates a "narrow" Fed mandate, that is, focusing solely on interest rates and avoiding involvement in topics like climate or an expanded understanding of employment. In his speeches, including at the IMF, he consistently defended the classical approach to monetary policy, which looks convincing to most economists.

• The main issue is his ability to work under political pressure. Warsh himself admits that the high level of US government debt (about 120% of GDP) and the rising costs of servicing it create serious constraints on the Fed's policy. So far, he has avoided making clear statements about how to account for this factor, although interest payments have already reached about 3% of GDP.

• Warsh is critical of the Fed's active policy, believing that the regulator should only set a medium-term course and stick to it. He repeatedly accused the organization of rising inflation and mistakes. He also believes that the development of AI will lead to lower prices, which theoretically can justify lower rates. He suggests managing the economy through short interest rates and reducing the role of the Fed.

• Warsh began his career at Morgan Stanley investment bank, where he was involved in mergers and acquisitions. As a result, he rose to the position of vice president and executive director. Then he moved to the White House, where he became an economic adviser to former President George W. Bush.

• At the age of 35, Warsh joined the Board of Governors of the Federal Reserve, becoming the youngest member in the history of the body. He was active during the 2008 crisis and was a liaison between the Fed and Wall Street. He retired in 2011, after which he worked in international expert organizations and boards of directors of large companies. After Donald Trump's victory in the 2017 presidential election, Warsh became one of his economic advisers.