Kevin Warsh: the man who could replace Jerome Powell as Fed chair

President Donald Trump has been musing about his potential replacement for Federal Reserve chair: Kevin Warsh is the man who may find himself taking over the Fed from current Chair Jerome Powell. Trump previously discussed firing Powell, though he has since walked these comments back. But Powell's term ends in 2026 anyway, meaning a replacement is coming sooner rather than later.

Reports have emerged that Trump is talking to Warsh about running the Fed. If Warsh, a former member of the Fed's Board of Governors, does get the job, he will be taking over a sector of the government that Trump has publicly expressed anger toward.

Warsh's beginnings

Warsh, 55, is a native of Albany, New York, and completed his undergraduate work at Stanford University, later earning his J.D. at Harvard University. Following college, he worked as a vice president and executive director for Morgan Stanley before working as an "economic adviser to President George W. Bush from 2002 to 2006 and a governor of the Federal Reserve Board from 2006 to 2011," said Business Insider.

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Like Powell, Warsh "does not have a graduate degree in economics," said CNN. But during his time on the Fed's board, he "helped coordinate the sale of Bear Stearns to JPMorgan Chase." Not all was positive, though, as Warsh also "allowed Lehman Brothers to go under in 2008, a watershed moment for global financial markets." Warsh was an adviser on Trump's 2024 transition team and is currently a "distinguished economics fellow at the Hoover Institution, a conservative think tank." He is already a favorite of Trump's; the president reportedly considered him for Treasury secretary during his second term and had also considered him to run the Fed during his first term.

Warsh's economic views

If Trump were to tap Warsh to run the Fed, it could alter the way the nation's central bank is run. Warsh is a "known financial hawk" who has been "critical of the U.S.' expanding debt," said Business Insider. He previously wrote in an op-ed that recent inflation was caused by a "government that spent too much and a central bank that printed too much." But most conventional economists do not agree, and instead "attribute inflation's eruption in 2021 mostly to pandemic-induced shocks to demand and supply," said CNN.

Then there is the question of interest rates. Powell is known for his willingness to allow rates to remain high to combat inflation, and Warsh is "widely considered to be even more hawkish" than Powell, said CBS News, which described Warsh as "widely respected." But Trump turning toward Warsh wouldn't be unprecedented, as he was "among the candidates that Trump considered to lead the Fed during his first term," and "some of Trump's economic advisers have previously urged Trump to choose him for the role," said The Wall Street Journal.

Warsh would be "offering something unusual for the MAGA movement: old-school Republican bona fides," said Politico. But his views have "also alarmed some of the more vocal supporters of Trump's protectionist trade and tariff policy vision," even when he was being considered for Treasury secretary. Additionally, Warsh has been a "vocal defender of globalization and free trade," which could put him at odds with some of the isolationists in Trump's camp. Despite this, Warsh remains the "odds-on favorite among policymakers and oddsmakers to replace Powell," said Quartz.