Kevin Warsh takes over as Fed chair amid expectations of slower rate cuts than Trump sought under Powell’s tenure.
Kevin Warsh has officially replaced Jerome Powell as chair of the Federal Reserve’s Board of Governors, following a contentious relationship between Powell and President Donald Trump. Trump pushed for faster interest rate cuts, but Powell resisted, leading to public disputes and a Justice Department subpoena over Fed-related comments. Powell will remain on the board, but his departure as chair marks a shift in leadership.
Warsh, a former Fed official and Wall Street veteran, has signaled support for rate cuts, citing deflationary pressures from AI-driven productivity gains. However, his reformist stance and prior Fed experience suggest a more cautious approach than Trump may prefer. The transition comes as markets weigh the potential pace of monetary easing under the new chair.
Trump’s frustration with Powell’s policies may resurface if Warsh does not deliver the rapid rate reductions the president sought. The change in leadership could influence market expectations for Fed policy in the near term.