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Trump Nominates Kevin Warsh as Next Federal Reserve Chair

  //politics-government.news-articles.net/content/ .. s-kevin-warsh-as-next-federal-reserve-chair.html
  Published in Politics and Government on Sunday, February 1st 2026 at 16:29 GMT by reuters.com
      Locales: Washington, D.C., New Jersey, UNITED STATES

Washington D.C. - February 1st, 2026 - In a move anticipated to dramatically reshape U.S. monetary policy, President Donald Trump today nominated Kevin Warsh as the next Chair of the Federal Reserve. The announcement, made late Wednesday, confirms weeks of speculation and signals a clear departure from the more accommodative policies of the current administration. If confirmed by the Senate, Warsh will assume leadership of the central bank at a critical juncture, with inflation remaining a persistent concern despite recent economic fluctuations.

Warsh, a seasoned economic figure and long-time ally of President Trump, previously served as Under Secretary of the Treasury for International Affairs during the George W. Bush administration. He's consistently advocated for a more hawkish approach to monetary policy, prioritizing price stability and demonstrating a willingness to utilize interest rate hikes as a primary tool to combat inflation. This stance contrasts sharply with that of the current Chair, Janet Yellen, who has prioritized full employment and maintained historically low interest rates for much of her tenure, even as inflationary pressures began to build.

Financial markets reacted swiftly to the news. The Dow Jones Industrial Average experienced moderate volatility, closing down 150 points amidst uncertainty regarding the potential impact of a policy shift. Bond yields, however, saw a noticeable increase, particularly on longer-term Treasury bonds, reflecting investor expectations of rising interest rates. Analysts at Goldman Sachs predict the Fed could implement at least three 25 basis point rate hikes in the first year of Warsh's leadership, should he be confirmed. "Warsh's track record is unambiguous," stated Dr. Emily Carter, Chief Economist at Goldman Sachs. "He believes that allowing inflation to become entrenched poses a greater threat to long-term economic stability than temporarily slowing growth with higher rates."

The timing of the nomination is particularly significant. While inflation cooled slightly in late 2025, it remains above the Federal Reserve's 2% target. The economy has shown resilience, but concerns linger about a potential slowdown, exacerbated by ongoing global supply chain disruptions and geopolitical instability. Warsh's appointment suggests the Trump administration is prioritizing a forceful response to inflation, even if it risks slowing economic growth. This contrasts with the Biden administration's emphasis on continued job creation and social programs, which often required maintaining lower interest rates.

The Senate confirmation process is expected to be fiercely contested. With the Senate closely divided, opposition lawmakers are likely to scrutinize Warsh's past statements and policy positions. Senator Elizabeth Warren has already signaled her opposition, accusing Warsh of being "out of touch with the needs of working families" and warning that his policies could trigger a recession. "Raising interest rates in the current environment is a dangerous gamble," Warren stated in a press release. "It will disproportionately hurt those who can least afford it - lower- and middle-income Americans."

Supporters of the nomination, however, argue that a strong and decisive response to inflation is necessary to protect the long-term health of the economy. Senator John Thune, a key Republican voice on economic policy, praised the nomination as a "bold step" that will "restore credibility to the Federal Reserve." He believes Warsh's commitment to fiscal responsibility will be a welcome change after years of unprecedented government spending.

Beyond interest rate policy, Warsh is also expected to push for greater transparency at the Federal Reserve and a reassessment of its regulatory framework. He has previously criticized the Fed's complex and opaque decision-making processes, calling for increased accountability and public access to information. This aligns with President Trump's broader agenda of reducing bureaucratic overreach and promoting transparency in government.

Looking ahead, the financial community will be closely watching the Senate hearings and the trajectory of economic data. The next few months will be crucial in determining whether Warsh will be confirmed and, if so, how significantly he will alter the course of U.S. monetary policy. The appointment of Kevin Warsh represents more than just a change in leadership at the Federal Reserve; it signifies a fundamental shift in the approach to managing the nation's economy.