Trump Picks Kevin Warsh for Central Bank Chair Role
Trump announced his decision via a Truth Social post Friday morning, concluding a months-long hunt for Powell's replacement. Warsh—an academic, Wall Street insider, and ex-member of the Fed's governing board—is set to assume leadership in May pending US Senate confirmation.
"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.
Throughout his search, Trump launched repeated verbal assaults against Powell for maintaining elevated interest rates, which theoretically would boost economic activity and lower borrowing costs on the nation's more than $30 trillion debt burden. Trump branded Powell a "moron," and a "numbskull" over his rejection of aggressive rate reductions.
Warsh historically championed higher interest rates, warning that excessive cuts risked triggering uncontrollable inflation. Yet his position has shifted recently toward supporting rate reductions while demanding "regime change at the Fed."
"He thinks you have to lower interest rates," Trump told media in December. "And so does everybody else that I've talked to."
Warsh maintains significant family connections to Trump. His father-in-law, Ronald Lauder, has donated substantially to Trump since 2016. During a 2018 meeting, Lauder pushed Trump to purchase Greenland from Denmark, according to former National Security Adviser John Bolton. Lauder, who inherited the Estee Lauder cosmetics fortune, controls commercial interests in Greenland and secured lithium extraction permits in Ukraine through Trump's minerals agreement with Kiev.
Financial markets responded with measured restraint to Warsh's appointment. Following the revelation, Dow futures declined 0.3%, S&P 500 futures slipped 0.4%, and Nasdaq Composite futures retreated 0.5%. Gold and silver tumbled sharply, with spot prices for both precious metals plunging 6.4% and 15.7%, respectively, after a recent explosive rally. The selloff suggests market trust in the nomination despite Warsh's commitment to rate cuts, which typically boost precious metal valuations.
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