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Donald Trump Nominates Kevin Warsh to Replace Jerome Powell as Fed Chair
US Fed: Donald Trump has announced former Fed official Kevin Warsh as the next chairman of the Federal Reserve. He will replace Jerome Powell in May, subject to Senate approval. Trump has been displeased with Powell's interest rate policy. Warsh previously served on the Fed Board, and his appointment is expected to shift the Fed's policy and independence.
US President Donald Trump announced on Friday that he will nominate former Fed official Kevin Warsh as the next chair of the Federal Reserve. If approved by the Senate, Warsh will replace the current Chair, Jerome Powell, in May. This decision has been viewed as an indication of a significant shift in the US central bank's policy direction, bringing the Fed closer to the White House and compromising its long-held political independence.
Trump nominated Jerome Powell to be the Fed Chair in 2017. However, over the last few years, Trump has continued to express discontent with Powell by claiming that he is not lowering interest rates quickly enough.
55-year-old Kevin Warsh has also served as a member of the Federal Reserve Board. He has also worked at the Fed since 2006 and left in 2011, making him the youngest Fed governor ever when he was appointed at age 35. He currently works as a fellow for the conservative-leaning think tank Hoover Institution and as a lecturer for the Stanford Graduate School of Business.
However, Warsh is also considered an unexpected choice for Trump because he has long been a supporter of higher interest rates. During the 2008-09 global economic recession, he questioned the Fed's low-interest rate policy and large-scale bond-buying programs. However, in recent years, he has also indicated support for lower interest rates.
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According to experts, Warsh's appointment could be a major step toward Trump's increasing control over the Fed. The Fed is one of America's most independent institutions, but Trump's public statements and attempts to pressure the central bank have raised concerns about its independence.
The Fed Chair is one of the most powerful economic positions in the world, responsible for controlling inflation, boosting employment, and overseeing the banking system in the United States. The Fed's interest rate decisions impact debt such as mortgages, car loans, and credit cards, impacting the entire economy.
If confirmed by the Senate, Warsh could face challenges such as disagreements within the Fed over interest rate cuts, market reactions, and inflation risks. Experts believe that central bank independence is essential for controlling inflation, and political interference could have far-reaching effects on monetary policy.
