President Donald Trump met Kevin Warsh on Thursday as he prepared to announce his choice for Federal Reserve Chair, a move that could reshape U.S. monetary policy and global markets. Trump told reporters he would name the Fed chair the next morning. He described the pick as widely respected and well known across financial circles. No formal announcement followed immediately.
The meeting occurred as Trump continued public criticism of current Fed Chair Jerome Powell. Powell’s term ends in May, and Trump has repeatedly pushed for steeper interest rate cuts.
Trump said Powell failed to cut rates aggressively enough despite easing inflation pressures. The Federal Reserve held rates at 3.5 to 3.75% on Wednesday after three quarter-point cuts last year.
So, why does this appointment matter so much to investors and policymakers alike?
Speculations intensified after Trump hinted his pick could have served years earlier. That comment revived focus on Kevin Warsh, a former Federal Reserve governor and Stanford professor.
Warsh has previously reached the final stage of the 2017 Fed chair search, ultimately leading to Powell’s appointment. Reports said Warsh agreed to accept the role after a call with Trump.
Trump’s search process involved Treasury Secretary Scott Bessent. Four finalists emerged, including Warsh, current Fed Governor Christopher Waller, BlackRock executive Rick Rieder, and White House economic adviser Kevin Hassett.
Trump earlier suggested Hassett was leading the race, later noting he wanted Hassett to stay in his current role. While Rieder learnt he would not receive the nomination, a White House spokesperson cautioned against speculations. Kush Desai said any reporting before an official announcement remains premature.
Prediction markets reacted strongly following Trump’s remarks. Warsh’s odds on Polymarket surged to 95% by Thursday evening, while Rieder’s odds fell sharply to 3%. Meanwhile, Waller and Hassett remained listed as possible alternatives. Still, betting activity suggested investors largely priced in a Warsh nomination.
Trump’s decision comes after months of direct attacks on Powell. Accusing him of harming economic growth by keeping borrowing costs elevated, Trump posted on Truth Social that Powell had no reason to maintain high rates. He argued inflation no longer posed a threat and said interest costs burdened the U.S. economy.
Trump has also mentioned borrowing costs should fall to about 1 percent, stating that any Fed chair candidate must support sharp rate reductions. Despite the political tension, crypto markets showed limited immediate reaction. Traders appeared cautious as they awaited an official announcement and clearer policy direction.
The Federal Reserve has not responded publicly to Trump’s latest statements. Powell has maintained a cautious approach due to tariff effects and lingering inflation concerns. Trump earlier said he expected to name his pick next week, later moving the timeline forward while signaling urgency as the race reached its final stage.
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With President Trump close to naming a new Federal Reserve Chair as Kevin Warsh emerges as the leading contender, this potential shift comes amid sharp criticism of Jerome Powell and renewed pressure to cut interest rates. Markets remain cautious, awaiting an official White House announcement.