WASHINGTON (Diya TV) — President Donald Trump said Friday he will nominate former Federal Reserve official Kevin Warsh to serve as the next chair of the Federal Reserve, a move that could reshape the central bank and bring it closer to the White House. If confirmed by the Senate, Warsh would replace current Fed Chair Jerome Powell when Powell’s term ends in May. Trump first appointed Powell in 2017 but has sharply criticized him in recent months for not cutting interest rates faster.

The Federal Reserve plays a central role in the U.S. economy. It sets short-term interest rates, fights inflation, supports job growth, and oversees the nation’s banking system. The Fed’s decisions influence borrowing costs for mortgages, car loans, and credit cards.

Trump has made clear that interest rates are a top priority. He has repeatedly said the Fed’s key rate should fall to about 1%. That is far below the current level of roughly 3.6%. Most economists say such deep cuts could risk higher inflation. Warsh’s nomination signals Trump’s desire for a Fed leader more aligned with his economic goals.

Kevin Warsh, 55, is no stranger to the Federal Reserve. He served on the Fed’s Board of Governors from 2006 to 2011. At age 35, he became the youngest Fed governor in history.

Warsh currently works as a fellow at the Hoover Institution, a conservative think tank. He also lectures at the Stanford Graduate School of Business. Before joining the Fed, he worked as an investment banker at Morgan Stanley and served as an economic aide in President George W. Bush’s administration. During the 2008 financial crisis, Warsh worked closely with then-Fed Chair Ben Bernanke. Bernanke later described him as a trusted adviser with strong market knowledge and deep Wall Street ties.

Warsh has long carried a reputation as a Fed “hawk.” That term describes officials who favor higher interest rates to keep inflation in check. During and after the Great Recession, he opposed several low-rate policies. He also warned that inflation could rise, even though it stayed low for years. In 2011, Warsh objected to a major Fed bond-buying program aimed at lowering long-term rates. He later voted for the move after pressure from Bernanke.

More recently, Warsh has softened his stance. In speeches and opinion pieces, he has voiced support for lower interest rates. In a January 2025 column in The Wall Street Journal, he praised Trump’s deregulatory agenda and spending cuts. He argued those policies could ease inflation and give the Fed room to cut rates.

Warsh’s nomination raises fresh questions about the Fed’s independence. For decades, presidents avoided public calls for rate cuts to protect the central bank from political pressure. Trump has broken with that tradition.

Since his reelection, Trump has stepped up efforts to influence the Fed. In August, he tried to remove Governor Lisa Cook to gain more control of the board. Cook sued to keep her position. The Supreme Court signaled last week that she may remain while the case continues. Economic research shows that independent central banks often manage inflation more effectively. Political leaders tend to favor low rates to boost growth, even when inflation risks rise.

Even as chair, Warsh would face limits. The Fed’s rate-setting committee includes 19 members, with 12 voting at each meeting. The group remains divided. Some officials worry inflation could persist. Others point to rising unemployment and slowing growth. Financial markets could also resist aggressive rate cuts. Investors may sell Treasury bonds if they see political pressure driving Fed decisions. That could push long-term rates higher and raise mortgage costs.

Trump briefly considered Warsh for the Fed’s top job during his first term before choosing Powell. Warsh’s family ties also draw attention. His father-in-law is Ronald Lauder, an heir to the Estée Lauder fortune and a longtime Trump donor. If the Senate confirms Warsh, his leadership would mark a sharp shift at the Federal Reserve. His recent calls for “regime change” and criticism of the Fed’s focus on climate and diversity issues suggest a new direction. The decision could shape interest rates, inflation, and economic growth for years to come.