Kevin Warsh has been preparing to lead the Federal Reserve for more than a decade.
He thought he had the job in 2017 , but President Trump had doubts. Warsh looked too young, and his history of worrying about inflation suggested he might not keep rates as low as Trump wanted. Trump picked Jerome Powell instead.
Warsh kept at it—criticizing Powell publicly, cultivating ties to Trump’s circle, and touting the president’s economic agenda. Now, at 55 years old, he finally has the job.
If confirmed by the Senate, Warsh would succeed Powell, who has been the target of sustained attacks from the president for not slashing interest rates. Powell’s term as chair expires in mid-May.
Warsh served for five years on the Fed’s board of governors, helping navigate the central bank’s response to the 2008-09 financial crisis. He left 15 years ago, and has spent much of that time criticizing the institution.
Former colleagues say his rhetoric shouldn’t be mistaken for rigidity. “He’s not an ideologue,” said Randall Kroszner , who served on the Fed’s board with Warsh from 2006 to 2009. “Since I’ve known him, he was someone who tried to get things done. His approach is, ‘Let’s articulate goals as clearly as we can, and then find the best path to get as close to those goals as we can.’”
The Fed lowered rates three times at the end of 2025, but officials were unusually divided over whether that was the best course of action. Powell led the central bank to cut last year despite divisions because of concerns the labor market might be more fragile than it appeared on the surface. Others think the Fed shouldn’t be cutting because asset markets are buoyant and businesses are pushing along tariff-driven cost increases.
Warsh, in television interviews and public appearances, has avoided specifying how he would handle these trade-offs. Instead, he has more generically invoked the example of former Fed Chairman Alan Greenspan , who in the mid-1990s held off on raising interest rates as the economy expanded steadily because inflation pressures were mild. The Greenspan Fed subsequently raised interest rates as the dot-com bubble inflated at the end of that decade.
Warsh warned in 2021, presciently, that the Fed was sowing the seeds of a bigger inflation problem by continuing to buy large quantities of Treasurys and mortgage-backed securities.
Warsh has put at the center of his candidacy a wholesale revamp of the Fed’s $6.6 trillion asset portfolio, which he has said is too large and should be part of a new accord with the Treasury Department that reduces the central bank’s footprint in money markets. In recent years, Warsh has also called for tougher regulation of private cryptocurrencies, something that met with stiff resistance from many Republicans this decade.
Several people who have spoken with Warsh said they have been taken aback by what they view as the caustic nature of his criticisms of Fed leaders. Former Fed officials have suggested Warsh could face suspicion from his new colleagues given how he waved off Trump’s attacks on the central bank.
“That’s going to be a real issue,” said Richard Fisher , who was president of the Dallas Fed during Warsh’s tenure on the board. “Kevin’s going to have to work very hard to overcome what I sense is a feeling amongst Federal Reserve Board staff of his attacking the Fed and almost turning his back immediately after he left.”
In 2010, when Warsh was still a Fed governor and some Republicans were unhappy that low interest rates were helping the Obama administration finance larger deficits, Warsh didn’t just defend Fed independence in passing—he devoted an entire speech to the subject, titled “An Ode to Independence.”
“Any attempt to influence inappropriately the conduct of Fed policy would yield a strong and forceful rebuke by Fed officials and market participants alike,” he told an audience of monetary-policy specialists. “The only popularity central bankers should seek, if at all, is in the history books.”
Warsh warned that governments would be “tempted to influence the central bank to keep monetary policy looser longer to finance the debt.” The Fed’s credibility demanded “fierce independence from the whims of Washington,” he said.
Warsh has more recently suggested that Fed leaders have used independence to shield themselves from appropriate accountability for policy missteps. In a speech last year, Warsh argued that the Fed had forfeited its claim to independence by failing at its core mission. “Central bankers should not be pampered princes,” Warsh said.
Last fall, Warsh disparaged a brief to the Supreme Court signed by all former living Fed chairs and a bipartisan group of Treasury secretaries. They warned the Fed’s independence from the White House would be lost if the president succeeds in his attempt to fire Fed governor Lisa Cook . “I did not know that senior economic officials’ at the Treasury and the Federal Reserve expertise went all the way to constitutional jurisprudence,” he told Barron’s.
Now, Warsh’s success in the job could turn on satisfying a president who expects the Fed to follow his lead and colleagues who have spent years on the receiving end of his criticism. The Fed chair wields enormous influence but cannot act alone. Monetary policy is set by committee, and forging consensus among 19 strong-willed policymakers—each with their own reading of the economy—is a core part of the job.
Young governor
Warsh, whose father manufactured school uniforms, was raised in upstate New York. At Stanford University, he developed a knack for networking his way into rooms with people who could help him—and impressing them once he got there. In 2002, when a Bush White House adviser called a Stanford economist looking for a sharp young hire, the professor immediately offered up Warsh: “The most brilliant student I’ve worked with.”
When Ben Bernanke joined the White House in 2005—in what would prove to be an audition to replace Alan Greenspan as Fed chair—Warsh made himself useful. He helped Bernanke prepare for his Senate confirmation hearings, then scored his own appointment to the Fed board in 2006. At age 35, Warsh became the youngest to take the job.
His market savvy and political connections proved invaluable during the financial crisis, putting him closer to the action than many more seasoned colleagues. He became so indispensable to Bernanke as a go-between with Wall Street chieftains and GOP leaders that Fed staffers developed a familiar refrain: “Have you run it by Warsh?”
One former staffer recalled how Warsh, a Fed governor in his own right, would introduce himself to lawmakers as an aide to Bernanke, vastly underselling his role.
On economic policy, Warsh was usually more concerned about the risks of higher inflation than weaker growth. He worried, incorrectly as it turned out, that ultralow interest rates and high budget deficits in the years immediately after the financial crisis would lead to high inflation.
In 2010, Warsh argued that by trying to push longer-term interest rates down, the Fed was allowing Congress and the White House to duck decisions he believed they needed to make to put the U.S. on a stronger economic footing. “We should put the burden on them,” Warsh told his colleagues during a tense moment at a November 2010 policy meeting where he privately argued against a bond-buying program being advocated by Bernanke.
Bernanke didn’t follow Warsh’s advice. “The reality was that the Fed was the only game in town. It was up to us to do what we could, imperfect as our tools might be,” Bernanke wrote in his 2015 memoir.
Warsh voted for the stimulus program, called quantitative easing, out of loyalty to Bernanke while publicly second-guessing it days later in a Wall Street Journal opinion article. His footwork helped position himself as an insider-turned-outsider within a Republican Party that was turning hostile to Bernanke. But it also piqued colleagues who believed such criticism would undermine the policy’s effectiveness by creating doubt over how long the Fed would sustain the program.
Warsh left the Fed in 2011 and became a fellow at Stanford’s Hoover Institution, joined the board of United Parcel Service and worked with hedge-fund investor Stanley Druckenmiller . He is married to Jane Lauder , the granddaughter of cosmetics mogul Estée Lauder and the daughter of Ronald Lauder , a major GOP donor and former classmate of Trump.
While still at the Fed, Warsh lamented that the Fed couldn’t solve all of the economy’s woes, including potentially misguided policies being pushed by Congress or the White House, which at the time was controlled by Democrats. “The Federal Reserve is not a repair shop for broken fiscal, trade or regulatory policies,” he said a few months before leaving the Fed.
Write to Nick Timiraos at Nick.Timiraos@wsj.com
