On January 30, U.S. President Donald Trump [Presidents] (2005) (htts ://nvexpress.net/ong-trump-de-de-citation-vien-chu-tich-fed-placed-new-jerome-powell (50202064.h) Mr. Kevin Warsh as Chairman of the U.S. Federal Reserve Reserve (Fed) (Fed), after Mr. Jerome Powell's tenure in May. Kevin Warsh was once considered by Trump for Chairman Fed in his early term nearly a decade ago. Now, when the opportunity to take this position comes before him, the more clear the challenge ahead becomes.
To run the Fed effectively, Warsh must win the trust of at least three groups. One is Fed officials - people you need to persuade to vote if you want to adjust the interest rate. The second is the financial markets - which can deflect the interest reduction effort if he claims to have political motives. The third is President Trump - former real estate entrepreneur who knows very well how to reduce or increase interest rates that can affect the loan party, whether business, household, or government.
"He's walking on the line. If considered too soft to the authorities, he would lose the support of Fed officials and hard to create consent", Raghuram Rajan - economist at the University of Chicago, former Governor of the Central Bank of India said.
However, if it offends the White House, Warsh is also at risk of bringing Fed back to the administration's sight. During Mr Trump's tenure, Chairman Fed Jerome Powell was constantly criticized for not lowering interest rates as fast as the President wanted. He is still under the U.S. Justice Department[citation](httts ://nvreex.net/chu-tich-fed-bi-dieu-tra-sun-su-5004455.html) due to the hearing regarding the Fed headquarters project. Powell called this investigation an excuse to force him to lower the interest rate.
Get out! [Kevin Warsh said at a conference, 2011. Photos:(htttttmst i1-hmddddn.vnecdn.net/2026/02/01/warsh-jsh-jshpegpegpeg914914914914718718718718718718718718718718718718718718718718718718718718718718718718718718718718718718718718718718718718718718718718718718718718----718718718718718718718----------------------------------------========================&&=-------------=--===============&=&&&&=&&&&&=&&&&&&&&&&&&&&&&&&&&&&&&&&&&&&&&&&&&
Kevin Warsh stated at a bank forum in New York in 2011. Image:AP
Even before becoming Chairman of Fed, Warsh was able to face a back-to-back approval process in the Senate. The two Republican senators have claimed to oppose the nomination if the criminal investigation with Powell has not been resolved. One of them was Thom Tillis - North Carolina State Senator and member of the Senate Bank Committee.
Another member of the committee - Democratic Senator Mark Warner of the state of Virginia also claimed "it would be hard to believe that the Fed Chairman chosen by President Trump could act independently".
On January 30, Mr Trump told reporters that he did not want to ask Warsh to pledge to cut interest rates, as that would be "unsuitable" even though "may still be allowed". "I want to keep things clean. But he obviously wanted to lower the interest rate. I've been watching him for a long time," Mr Trump said.
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However, just a month ago, Mr Trump announced on social networking: "Whoever disagrees with me will never become Chairman Fed". He also repeatedly emphasized that he would select only candidates to want to reduce interest rates.
The unpredictable haven't stopped there yet. Although the term of president was completed in May, Powell's tenure as a member of the Assembly of Governors continued to the month 1/2018. This meant that he was still involved in the board setting interest. That would put Warsh in an unprecedented situation in the last 80 years: a former Fed chairman may be in charge of new leadership.
Analysts believe that expressing independence from the White House is likely to be the biggest challenge to Warsh. Alan Blinder - former Vice President Fed said the most important unknown is the commitment of Warsh to Mr Trump in exchange for the nomination. Blinder was concerned about private exchanges between Trump and Warsh regarding Fed policy.
"Everyone knows Mr Trump wants some kind of loyal commitment. I hope Kevin Warsh doesn't make such a commitment," the Blinder said.
According to Blinder, Warsh has market experience and monetary policy. These are factors that enable him to make good preparations for this position. But more importantly, Warsh is the one who has the ability to influence other Fed officials when arguing policy.
"He has personal skills and diplomatic abilities, knows how to fit people. He's very good at that and he's very sympathetic", Blinder remarked.
Fed, though, is not alone with the Chairman. There were 19 officials on board who set interest rates, of which 12 had the right to vote. These included seven members of the Governorial Council, Chairman Fed New York and 4 of the other 11 Fed presidents of the region according to rotational mechanisms.
The Fed operates on a unanimous basis. Thus, the Chairman's opinion may still be dismissed by the majority.
"Warsh will have to convince his colleagues that reduced interest rates are appropriate this year. But it would be very difficult if the labour market didn't appear to show any further signs of decline or the pressure of inflation didn't drop significantly at the end of the year", remarked Matthew Luzzetti - the chief of economics at Bristole Bank.
Warsh also frequently criticized the balance sheet for Fed's $6,600 billion balance sheet, massive capital following the 2008-2009 recession and pandemic. In these stages, the Fed buys back trillions of government bonds and mortgage guarantees to lower long-term interest rates.
He claimed that this large-scale purchase of bonds allowed Congress to spend their hands vigorously without having to worry about increased loans. Warsh also argued that narrowing down the amount of holding assets would reduce the amount of money in the economy, from which to reduce inflation pressure and allow the Fed to go deeper than short-term interest.
However, the sale of these bonds would be risky. The banks are accustomed to the abundance of cash in the financial system that these measures bring.
Warsh also criticized the Fed's economic models for being wrong to assume that high economic growth could cause inflation to accelerate. "Instead of that, inflation caused by excessive spending and the central bank printing money too much," he said in the post on *Wall Street Journal last year.
The market response on January 30 shows that investors rate Warsh as low risk options. "He is respected by the financial markets. No one was assigned to this position without reducing interest rates in short term. However, I believe that in the long term, he would be a reliable candidate", David Bahnsen - the investment director of The Bahnsen Group remarked on *CNBC.
Senator Tillis also acknowledged that Warsh was "a capable candidate", but emphasized "the protection of Fed's independence from political intervention or legal threat is impossible to compromise".