President Trump is set to announce his choice to replace Jerome H. Powell as chair of the Federal Reserve on Friday and is expected to select Kevin M. Warsh, a former Fed official, for the job, according to multiple people familiar with his plans who were not authorized to discuss the decision publicly.
No decision is final until an announcement has been made, but Mr. Trump met with Mr. Warsh at the White House on Thursday. The president told reporters later that day that he would soon announce someone who was “known to everybody in the financial world.”
“A lot of people think that this is somebody that could’ve been there a few years ago,” Mr. Trump added. That was an apparent nod to Mr. Warsh, whom the president almost selected as Fed chair during his first term. Instead, Mr. Trump chose Mr. Powell, who quickly became a frequent target of Mr. Trump’s ire for his refusal to accede to the president’s demands for lower borrowing costs.
Mr. Trump has repeatedly said he would pick a Fed chair who supported cutting interest rates, which currently stand at 3.5 percent to 3.75 percent. The president has instead called for rates to be slashed to 1 percent, saying that the United States should be paying the lowest interest rate in the world.
On Thursday, he attacked the Fed for its decision a day earlier to hold rates steady, saying Mr. Powell had “absolutely no reason” to keep borrowing costs at their current level.
“We should have a substantially lower rate now that even this moron admits inflation is no longer a problem or threat,” the president wrote on social media. “He is costing America Hundreds of Billions of Dollar a year in totally unnecessary and uncalled for INTEREST EXPENSE.”
A White House spokesperson did not respond to multiple requests for comment about Mr. Warsh.
Mr. Warsh was first appointed to the Fed by President George W. Bush and served as a Fed governor from 2006 and 2011. He has supported the need for lower rates, while also calling for “regime change” at the Fed. Mr. Warsh, who has deep ties to Wall Street, currently works with billionaire investor Stanley Druckenmiller. Mr. Druckenmiller is close with Scott Bessent, Mr. Trump’s Treasury secretary, who led the search process for the next Fed chair.
Friday’s announcement will cap an extensive, highly publicized audition process for the job. At one point, Mr. Bessent was said to be considering more than 10 candidates. That included Kevin A. Hassett, who currently serves as director of the White House’s National Economic Council, and Christopher J. Waller, a current Fed governor. Rick Rieder, a top executive at BlackRock, the world’s largest asset manager, was also a finalist.
Mr. Trump has said publicly that he wanted Mr. Hassett to stay at the White House.
Mr. Hassett, a Trump loyalist who was once seen as a front-runner, appeared to lose favor after the Justice Department opened up a criminal investigation into Mr. Powell and sent the central bank grand jury subpoenas earlier this month. That prompted Mr. Powell to directly call out the administration in an extraordinary video for trying to use legal threats as “pretexts” to coerce the Fed to lower borrowing costs.
The escalation from the administration drew a sharp rebuke from Republican lawmakers, including members of the Senate Banking Committee who will be pivotal in confirming the next Fed chair. They expressed heightened concern about Mr. Trump picking someone who was seen as close to the administration. Senator Thom Tillis, a North Carolina Republican, even went so far as to say he would oppose the confirmation of any nominee for the Fed until Mr. Powell’s legal matter was resolved.
Colby Smith covers the Federal Reserve and the U.S. economy for The Times.
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