Former 'Inflation Hawk' Kevin Warsh To Replace Jerome Powell - What's His Stance On US Economy, Trump Administration

(MENAFN- Live Mint) United States President Donald Trump, on Friday, 30 January 2026, nominated his longtime ally and former Federal Reserve governor, Kevin Warsh, to succeed Chairman Jerome Powell as the next Chairman of the US central bank amid the federal administration's plea to cut the interest rates of the economy.

“I am pleased to announce that I am nominating Kevin Warsh to be the CHAIRMAN OF THE BOARD OF GOVERNORS OF THE FEDERAL RESERVE SYSTEM,” said President Trump in his Truth Social announcement.

Also Read | US Fed Chairman LIVE: Trump picks ally Kevin Warsh to replace Powell

Kevin Warsh's nomination needs to be approved by the US Senate before he takes over the role of the Federal Reserve Chairman from Jerome Powell in the near future.

Trump's nomination to replace Powell with Warsh comes at a time when the federal administration has been seeking further rate cuts in the US economy, while the Fed's FOMC charts a cautious way ahead. This nomination also comes days after the US Fed's FOMC decided to keep the key benchmark interest rates unchanged at 3.50-3.75% for the US economy.

From 'inflation hawk' to 'too slow with rate cuts'?

According to a Financial Post report, Kevin Warsh has earlier been what people call an inflation“hawk” - a term which is used to describe federal policymakers who are more focused on prioritising stable prices and low inflation in the economy.

Also Read | Dow Jones, S&P 500, Nasdaq slip after Trump picks Kevin Warsh as Fed Chair

The move is usually done to facilitate a tighter economic policy and focus on lower inflation rates in the country's economy. This was Warsh before he resigned as a Federal Reserve governor in the year 2011, ahead of his 2018 term end.

The news report also highlighted that Warsh has increased his critisism for the US Federal Reserve backing the Trump administration's policy stances than US Fed's cautious moves.

In 2025, talking about the US economy, Kevin Warsh said that the US Federal Reserve has strayed from its monetary policy mission into political areas where it lacked expertise, claiming that the central bank is making poor policy choices, holding back America's economy from further growth.

Relation with Trump administration

According to a Guardian report, although Kevin Warsh has warned about inflation risk in the US economy, he has also backed Trump's ask about the US Federal Reserve being“too slow” to cut the key benchmark interest rates in the economy.

Also Read | Who is Kevin Warsh? Ex-Fed governor nominated to be the new Chair

Higher interest rates in an economy are likely to raise inflation due to the higher risk of unemployment in the country.

Last year, he also said that the Fed's central bankers should not be treated as“pampered princes” and it too regularly“opines on matters outside its remit”, which has led to“systemic errors” in its main role of trying to keep prices stable, according to the news portal's report.

“He thinks you have to lower interest rates,” said Trump, talking about Kevin Warsh in an interview in December 2025.

Will Warsh support Trump?

US Fed Chairman nominee Kevin Warsh taking over is not a guaranteed“yes” in terms of an upcoming rate cut for the US economy; however, his recent critique of the Fed's policy decisions shows a potential leaning towards a reduction.

According to a report from the news portal The New York Times, Kevin Warsh supports Trump's economic agenda, especially on banking deregulation, as last year he argued about how the Federal Reserve needs a“regime change,” criticising consideration of policies focused on climate and on inclusion.

The news report also highlights that the Warsh has reportedly publicly played down the inflationary effects of Trump's tariffs.

“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. On top of everything else, he is 'central casting,' and he will never let you down. Congratulations Kevin!” said Trump in his announcement on Friday.

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