Trump nominates former Fed governor Kevin Warsh as next Fed chair

Donald Trump confirmed on Friday that he was nominating former Fed governor Kevin Warsh as the next chair of the Federal Reserve.

Warsh served as Fed governor between 2006 and 2011.

In a post on Truth Social detailing the appointment, the US President said he had "no doubt" that Warsh "will go down as one of the GREAT Fed Chairmen, maybe the best".

Trump said that Warsh, who became the youngest Fed governor ever at 35, has conducted "extensive research" in the field of economics and finance.

"Kevin issued an Independent Report to the Bank of England proposing reforms in the conduct of Monetary Policy in the United Kingdom. Parliament adopted the Report's recommendations," he said.

He also noted that in addition to serving as a member of the Board of Governors of the Fed, 55-year old Warsh served as the central bank’s representative to the Group of Twenty (G-20), and as the board's emissary to the Emerging and Advanced Economies in Asia.

"On top of everything else, he is ‘central casting’, and he will never let you down," Trump said.

Warsh, whose appointment is subject to approval by the US Senate, will replace Jerome Powell when his term ends in May.

On Thursday, Trump referred to Powell as a "moron". In a post on Truth Social, he said: "Jerome ‘Too Late’ Powell again refused to cut interest rates, even though he has absolutely no reason to keep them so high.

"He is hurting our Country, and its National Security. We should have a substantially lower rate now that even this moron admits inflation is no longer a problem or threat. He is costing America Hundreds of Billions of Dollar a year in totally unnecessary and uncalled for INTEREST EXPENSE."

His comments came after the Fed announced on Wednesday that it was keeping the lending rate at 3.5% to 3.75%.

Warsh was considered relatively hawkish during his time as Fed governor. However, more recently he has aligned himself with Trump and called for lower interest rates.

Susannah Streeter, chief investment strategist at Wealth Club, said that while Warsh did have "a reputation as being an advocate of tighter monetary policy, earning the ‘hawk’ moniker, he’s recently been publicly advocating for a fresh cut in interest rates, aligned with Trump’s thinking".

"However, his experience and past attitude imply he’s likely to hold the line if sharp inflationary pressures return."

David Morrison, senior market analyst at Trade Nation, said: "Overall, it looks like a good choice that most can get behind. Mr Warsh has promised to bring transparency to the US central bank and is likely to make some fundamental changes. At the same time, he doesn’t sound like a pushover. So, the President may not get all the rate cuts for which he’s so desperate."