Observers are cautiously optimistic after President Donald Trump announced on Friday that he would appoint former Federal Reserve governor Kevin Warsh as the next head of the US central bank.
The president has frequently criticized Fed Chair Jerome Powell for not lowering interest rates more quickly, and the decision concludes a well reported hunt for Powell’s successor.
Trump stated to reporters on Friday that Warsh “certainly wants to cut rates,” but he did not want to grill Warsh about his pledges to do so.
“I have known Kevin for a long period of time, and have no doubt that he will go down as one of the GREAT Fed Chairmen, maybe the best,” Trump wrote on Truth Social, announcing his choice.
“On top of everything else, he is ‘central casting,’ and he will never let you down,” Trump added.
Warsh, 55, was the youngest person to serve as a Fed governor, a role he held from 2006 to 2011.
Trump considered Warsh for the top Fed job too during his first presidency, but eventually chose Powell — a decision he quickly soured on.
Precious metals, which are seen as safe haven investments, saw a decline in price on Friday, suggesting that investors were comforted by Trump’s decision. The value of the dollar increased.
Josh Lipsky, chair of the Atlantic Council’s international economics, told AFP, “I think markets are broadly happy at the moment.”
“It is a pick that another Republican president may have made,” Lipsky stated. “He cares about the history of the Fed, the process of the Fed, central bank independence, he’s talked about this before.”
Powell’s term as chairman expires in May, and it’s yet unclear if he will also resign from the Fed’s board of governors, which would allow Trump to fill another position.
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