Episode summary
Instant Reaction: Trump Nominates Warsh for Fed Chair | Bloomberg Businessweek
Bloomberg Businessweek Daily
· · 15 min · Hosts: Carol Massar, Tim Stenovec
Summary
President Donald Trump said he intends to nominate Kevin Warsh to be the next chair of the Federal Reserve, setting up a leadership change at the central bank when Jerome Powell’s term ends in May. The announcement came after Bloomberg’s reporting had already pointed to Warsh as the likely pick, and the discussion quickly focused on what his appointment could mean for interest rates, inflation, and the Fed’s independence.
The analysts said Warsh is likely to be viewed as more hawkish than Trump would prefer, though his recent comments about AI-driven productivity, heavy capital spending, and deregulation suggested to some that he could justify lower inflation alongside faster growth. They also noted that Warsh’s ties to Trump and Republican donors may have helped him emerge as the choice after being passed over in 2017.
Markets reacted with a mild risk-off tone, with equities softer, treasury yields firmer earlier, and the dollar and gold moving in response to expectations that Warsh could lean more hawkish than alternative candidates. The conversation also flagged a possible Senate confirmation fight, especially if unresolved legal issues surrounding Powell remain in the background.
Key takeaways
- Bloomberg’s analysts said Kevin Warsh is widely seen as more hawkish than Trump wanted, especially on interest rates.
- Warsh has argued that AI, capital spending, and deregulation could support faster growth with lower inflation, which may have made him more acceptable to Trump.
- The market reaction was measured, with the dollar firming at points and gold and equities reacting to the prospect of a more hawkish Fed chair.
- The analysts said Warsh’s Senate confirmation could be complicated if the dispute over Powell-related records is not resolved.
- Jerome Powell’s term as Fed chair ends May 23, leaving time for confirmation before the transition.
Notable quotes
“President Trump has announced via his truth social account that he is nominating former Fed Governor Kevin Worsh to succeed Jay Powell”
“the biggest issue has been whether Wars would be too hawkish given that the president wants extremely low interest rates”
“Worsh has made some comments recently to the effect that AI and the massive capital spend we've seen and the deregulation of the Trump administration would mean faster growth with lower inflation”
“when he was on the Fed, he was very reluctant to cut interest rates even during the great financial crisis”
“so, it's a different kind of leadership for the Fed for the last eight years, and now it looks like 12 years”
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From the episode’s captions: roughly the first two minutes, lightly cleaned. Keep watching on YouTube →
Topics
- fed chair nomination
- trump truth social
- monetary policy
- interest rates
- senate confirmation
Watch the episode
Watch “Instant Reaction: Trump Nominates Warsh for Fed Chair | Bloomberg Businessweek” on YouTube
Summary, takeaways and quote selection by Octagon. Quotes are short excerpts; the full conversation is in the episode.
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