KEY POINTS
- Kevin Warsh is emerging as the leading contender to become Federal Reserve chair after a White House meeting.
- Markets reacted quickly, with Treasury yields and the dollar rising on expectations of change.
- The selection could shape US interest rate policy but would not give the chair unilateral power.
Former Federal Reserve Governor Kevin Warsh visited the White House this week as President Donald Trump moves toward announcing a nominee to replace Federal Reserve Chair Jerome Powell, according to two people familiar with the discussions.
The possible nomination of Kevin Warsh has drawn close attention from global markets and policymakers as President Donald Trump prepares to name a successor to Jerome Powell when Powell’s term ends in May.
Warsh, who served as a Federal Reserve governor from 2006 to 2011, met with Trump on Thursday, according to a person familiar with the meeting.
A second source briefed on the discussion said Warsh impressed Trump as candidates are vetted.
Trump said he would announce his nominee Friday morning. In Asian trading, US Treasury yields rose after the remarks.
The ten year yield gained three basis points and the thirty year yield rose five basis points. The dollar index climbed as much as zero point three percent.
Prediction market Polymarket showed a sharp shift toward Warsh, with his implied probability rising to about eighty five percent, while Rick Rieder fell to roughly seven percent.
Polymarket has previously aligned with major outcomes, including the Nobel Peace Prize announcement in 2025.
“Warsh is viewed as market literate but institutionally minded,” said Sarah Binder, senior fellow at the Brookings Institution. “Still, the chair governs by consensus.”
Former Federal Reserve economist Claudia Sahm said bond market moves reflect expectations, not certainty. “Any chair must work within the Federal Open Market Committee,” Sahm said.
| Indicator | Market move |
|---|---|
| Ten-year Treasury yield | +3 bps |
| Thirty-year Treasury yield | +5 bps |
| Dollar index | +0.3% |
Trump criticized Powell this week for not supporting rate cuts at the latest meeting. Powell has cited inflation risks and labor market strength.
“Policy is set by twelve voting members, not one,” said Christopher Waller, a Federal Reserve governor, in a recent speech.
Warsh has criticized crypto currencies, questioning Bitcoin volatility in a 2018 Wall Street Journal opinion piece.
He is a visiting fellow at Stanford University’s Hoover Institution. If confirmed by the Senate, Warsh would face a divided committee.
At the latest meeting, two officials voted to cut rates while most favored holding them between three point five percent and three point seven five percent. Global investors are monitoring developments closely.
The expected announcement highlights how leadership changes at the Federal Reserve are watched worldwide. While a new chair can influence priorities, monetary policy will remain driven by collective decisions and economic data.
Author’s perspective
In my analysis, Warsh’s rise reflects a broader political push to test the Fed’s independence amid slowing disinflation and election cycle pressure for easier financial conditions.
I predict the Federal Reserve will formalize clearer rate guidance bands to counter political scrutiny and stabilize long term yields.
For households and small businesses, borrowing costs may remain volatile but more transparent. Closely track FOMC dot-plot dispersion, not headlines, to anticipate policy direction.
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