US President Donald Trump nominated Kevin Warsh, a former Federal Reserve governor, to helm the central bank, but the confirmation still faces political hurdles.
In a social media post, Trump praised Warsh, saying “he will go down as one of the GREAT Fed Chairmen, maybe the best. On top of everything else, he is ‘central casting’ and will never let you down.”
Earlier, Treasury yields rose on bets that Warsh would not maintain a campaign of interest rate cuts. Despite having argued for reductions recently, “Warsh has a long hawkish history that markets have not forgotten,” one analyst told Bloomberg.
The selection has consequences beyond monetary policy: Trump’s pressure on the Fed — he has sought to fire one governor and his administration has launched a criminal investigation into current chair Jerome Powell — has threatened to erode the bank’s independence, with one senator pledging to block any Fed appointments until the Powell probe is resolved.