US President Donald Trump, on Wednesday (local time), officially nominated Kevin Warsh to be the next chairman of the Federal Reserve, CNBC reported.
If confirmed by the Senate, Warsh will replace current Fed chair Jerome Powell for a four-year term. In a statement posted online, the White House said that Trump’s nomination was transmitted to the Senate. The nomination comes a month after Trump publicly announced that he wanted Warsh to be the next Federal Reserve chairman.
Meanwhile, Senator Thom Tillis of North Carolina has said he will block Warsh’s confirmation in the Senate unless the US Attorney’s Office in Washington, DC, drops its federal criminal investigation into Jerome Powell.
In his first term at the Federal Reserve, Kevin Warsh joined the central bank just as it was about to confront a global financial crisis and play a critical role in stabilizing the world economy.
Now, he returns under very different conditions and is expected to work with a notoriously unpredictable president who is likely to place significant, but very different, demands on him, CNBC reported.
Here’s all you need to know about Kevin Warsh:
Warsh is a Federal Reserve veteran who served from 2006 to 2011, a pivotal period that spanned the lead-up to and aftermath of the global financial crisis, when the central bank worked to stabilize the economy. Appointed by President George W. Bush, he was among the youngest individuals ever to serve on the Fed’s Board of Governors.
At the Federal Reserve, Warsh was responsible for the design and implementation of emergency lending programs that were aimed at stabilizing credit markets. He also played a crucial role in shaping several initiatives aimed at rescuing the broader economy. One such initiative, created separately by the Treasury Department, was the Troubled Asset Relief Program (TARP), which was led by Neel Kashkari, now president of the Minneapolis Federal Reserve.
He is a Stanford University graduate who earned his law degree from Harvard and eventually married into the Lauder cosmetics family. Before joining the central bank, he worked in investment banking at Morgan Stanley and served in the George W. Bush White House as a special assistant to the president for economic policy.
Currently, he is a distinguished visiting fellow at Stanford University.
Warsh’s appointment marks a shift from Powell’s approach.
According to the report, Warsh’s appointment would mark a stark philosophical shift from Jerome Powell’s pragmatic, consensus-driven approach and could indicate a potential tightening of the bank’s tolerance for inflation and balance sheet expansion. He would take over the seat currently held by Stephen Miran, whose term ends on Saturday.
Miran said, “Chairman-designate Warsh has a long history of being an innovative and original thinker on monetary policy,” and added that he has had a lot of important insights over the years.
He emerged from a competitive selection process that initially included 11 candidates, including current and former Federal Reserve officials, prominent economists, and several Wall Street investment professionals, including BlackRock’s fixed income chief, Rick Rieder. The field was gradually narrowed to five, then four finalists, before Warsh was ultimately chosen.
