Trump Taps Warsh as Next Fed Chair in Bid to Balance Growth and Inflation

Warsh's nomination is seen as one of Trump's smartest moves, as he must thread the needle between the president's desire for lower rates and the Fed's mandate to control inflation.

Jan. 31, 2026 at 9:55pm

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President Trump has nominated Kevin Warsh, a former Federal Reserve governor, to be the next chairman of the Federal Reserve. Warsh is seen as a hawk on inflation who will need to balance Trump's push for lower interest rates and faster economic growth with the Fed's dual mandate of maintaining price stability and full employment. Warsh has criticized the Fed's recent policies as straying too far from its core mission, and he will likely work to downsize the central bank's balance sheet while modestly lowering short-term rates to try to bring inflation closer to the 2% target.

Why it matters

Warsh's nomination is a critical appointment that will shape the direction of monetary policy and the economy in the coming years. As the new Fed chair, Warsh will have to navigate the competing priorities of the White House and the central bank's mandate, which could put him at odds with the president at times. His success or failure in this balancing act will have major implications for inflation, interest rates, economic growth, and the financial markets.

The details

Warsh, who previously served as a Fed governor during the 2008 financial crisis, has been a vocal critic of the central bank's policies in recent years, arguing that it has strayed too far from its core mission of controlling inflation. He has warned that the Fed's easy money policies and expanded role in social and environmental issues have set the stage for runaway inflation, which has become a major political liability for the Biden administration. As the new Fed chair, Warsh will likely work to downsize the central bank's massive balance sheet while modestly lowering short-term interest rates in an effort to thread the needle between Trump's desire for faster growth and the Fed's mandate to maintain price stability.

  • Warsh will take over as Fed chair when Jerome Powell's term ends on May 15, 2026.
  • Inflation remains elevated above the Fed's 2% target rate as Warsh assumes the chairmanship.

The players

Kevin Warsh

A former Federal Reserve governor who has been nominated by President Trump to be the next chairman of the Federal Reserve. Warsh is seen as a hawk on inflation who will need to balance the president's push for lower interest rates and faster economic growth with the Fed's dual mandate.

Donald Trump

The President of the United States who has nominated Kevin Warsh to be the next Federal Reserve chairman. Trump is pushing for lower interest rates and faster economic growth, which could put him at odds with Warsh's inflation-fighting priorities.

Jerome Powell

The current Federal Reserve chairman whose term will end on May 15, 2026, when Warsh is expected to take over the role.

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What they’re saying

“If anyone can walk this very precarious line, it's Kevin Warsh.”

— Charles Gasparino, Author (nypost.com)

“Warsh will thread the needle, lowering short-term rates while he downsizes the Fed's massive balance sheet.”

— Charles Gasparino, Author (nypost.com)

What’s next

The U.S. Senate will need to confirm Warsh's nomination before he can officially take over as the new Federal Reserve chairman on May 15, 2026.

The takeaway

Warsh's nomination represents a critical juncture for the Federal Reserve, as the central bank must balance the competing priorities of the White House and its own mandate to maintain price stability and full employment. Warsh's success or failure in this balancing act will have major implications for the direction of monetary policy, inflation, interest rates, and the overall health of the U.S. economy in the coming years.