By: Rita Cook
WASHINGTON D.C. – Is there a new Federal Reserve Chairman in town compliments of President Donald Trump?
Possibly, if the Senate can confirm him.
Late last week Trump nominated Kevin Warsh to serve as Chairman of the Board of Governors of the Federal Reserve System.
Warsh is a graduate of Stanford University and Harvard Law School and he began his career in the 1990s working in mergers and acquisitions at Morgan Stanley.
He left the Fed in 2011 and did a stint at Stanford University.
He also worked with billionaire Stanley Druckenmiller and was a partner at Duquesne Family Office helping too, helping to oversee around $11 billion. Fun fact, in the 90s Druckenmiller worked with current U.S. Treasury Secretary Scott Bessent to “make a profit of over $1 billion for investor George Soros by betting against the British pound” according to Reuters.
As you can see from the Soros mention and the players involved, the left and right really do work together, more than one would have you believe.
For a quick lesson, let us discuss what the Federal Reserve is and what it is not.
It is not a government agency even though it does get confused as being one.
It is an independent entity within the government with an unusual public-private structure. The Federal Reserve Banks are organized similarly to private corporations and owned by member banks. The part where the government comes in is that it oversees the Federal Reserve, which is accountable to Congress.
Jerome Powell, the current head of the Fed has been on the board since 2012 and has served as its chair since February 2018, named during Trump’s first term.
Now Trump has nominated Warsh to replace Powell.
“Mr. Warsh is exceptionally well-prepared to lead the world’s most influential central bank, with a distinguished background including degrees from Stanford University and Harvard Law School, prior roles as a Morgan Stanley executive and top economic advisor to the Bush Administration, and service as the youngest-ever Federal Reserve Governor — where he helped steer the institution through the 2008 financial crisis,” Trump said in a statement
Senate Committee on Banking, Housing and Urban Affairs Chairman Tim Scott said “The Federal Reserve’s decisions touch every American household, from mortgage rates to retirement savings, and President Trump has been clear that bringing accountability and credibility to the Federal Reserve is a priority, and his nomination of Kevin Warsh reflects that focus.”
The Wall Street Journal Editorial Board said “Does Kevin Warsh know what he’s getting into as President Trump’s nominee to be the next Chairman of the Federal Reserve? Yes, he does, which is only one of the reasons he is the right choice for a central bank that needs reform after a generation of exceeding its proper monetary remit… This is President Trump’s best second-term appointment.”
Lindsey Johnson, President and CEO of Consumer Bankers Association commented “On behalf of America’s leading Main Street banks, we congratulate Kevin Warsh on his nomination to serve as Chair of the Federal Reserve. Mr. Warsh’s depth of expertise and understanding of the Federal Reserve’s dual mandate will be critical as the central bank navigates a complex economic environment and works to maintain stability, confidence, and long-term growth. We look forward to working with Mr. Warsh and policymakers to advance sound, predictable policies that support a strong economy, a resilient financial system, and broad access to credit for consumers and small businesses nationwide.”
Powell has been tapped to be replaced for a number of reasons including intense political pressure regarding interest rate policies, accusations of economic mismanagement, and a criminal investigation into his testimony regarding the $2.5 million renovations of the Federal Reserve headquarters.
He has also faced strong criticism for keeping interest rates too low for too long therefore creating a stock market bubble that was followed by a failure to pivot quickly enough to curb rising inflation according to the Heritage Foundation.
If Warsh survives the Senate confirmation hearings and is approved, he will take over when Powell’s term expires in May.
