US President Donald Trump officially nominated Kevin Warsh to be the new chairman of the Federal Reserve on Wednesday (local time), CNBC reported.
If confirmed by the Senate, Warsh will replace current Fed Chairman Jerome Powell for a four-year term. In a statement posted online, the White House said Trump’s nomination had been referred to the Senate. The nomination comes a month after Trump publicly announced that he wanted Warsh to be the next chairman of the Federal Reserve System.
Sen. Thom Tillis of North Carolina, meanwhile, said he would block Warsh’s confirmation in the Senate unless the U.S. Attorney’s Office in Washington, DC, drops the federal criminal investigation into Jerome Powell.
In his first term at the Federal Reserve, Kevin Warsh joined the central bank just as it was poised to confront the global financial crisis and play a key role in stabilizing the world economy.
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He now returns on very different terms and is expected to work with a notoriously unpredictable president who is likely to make significant but very different demands on him, CNBC reported.
Here’s everything you need to know about Kevin Warsh:
Warsh is a veteran of the Federal Reserve, having served from 2006 to 2011, a key period spanning before and after the global financial crisis, when the central bank worked to stabilize the economy. He was appointed by President George W. Bush and 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 aimed at stabilizing credit markets. He also played a key role in shaping several initiatives aimed at saving the wider economy. One such initiative, created separately by the Treasury Department, was the Troubled Asset Relief Program (TARP), led by Neel Kashkari, now president of the Minneapolis Federal Reserve.
He is a graduate of Stanford University who received a 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 Special Assistant to the President for Economic Policy.
He is currently a Distinguished Visiting Fellow at Stanford University.
Warsh’s appointment marks a shift away from Powell’s approach
According to the report, Warsh’s appointment would mark a significant philosophical shift from Jerome Powell’s consensus-driven pragmatic approach and could signal a potential tightening of the bank’s tolerance for inflation and balance sheet expansion. He will take over the seat currently held by Stephen Miran, whose term ends on Saturday.
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Miran said, “Chairman-designate Warsh has a long history as an innovative and original thinker in the area of monetary policy,” adding that he has gained many 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 fixed-income chief Rick Rieder. The field was gradually narrowed down to five, then four finalists, before Warsh was finally selected.
