Big Take: How Kevin Warsh Could Shape the Fed’s Future

Podcast: Big Take (Bloomberg & iHeartPodcasts)
Episode Date: January 30, 2026
Host: Sarah Holder
Guests: Amera Amokwe (Fed Reporter), Solea Mohsen (Sr. Washington Correspondent), David Gura

Episode Overview

This episode analyzes President Trump's high-profile nomination of Kevin Warsh as the next Chair of the Federal Reserve. The discussion centers on Warsh’s economic philosophy, political pressures shaping the Fed, potential implications for central bank independence, and the challenges Warsh will face if confirmed. Through interviews and expert insight, the episode breaks down what Warsh’s return signals for Fed policy and the broader economy at a moment of political turbulence.

Key Discussion Points & Insights

1. Kevin Warsh’s Background and Fed Credentials

• Past Roles: Warsh is a former Fed governor, served during the 2008 financial crisis, and was once a contender for the Fed chair in 2017.
  • “[Warsh] was on the central bank's Board of Governors. He served during the financial crisis. He's been an economic advisor for the president. Trump even said he was central casting.” — Sarah Holder [05:11]
• Wall Street Ties: Warsh is known for having close connections with Wall Street, which shaped his influential role in crisis management.
• Inflation Hawk Turned Dove: Historically cautious about low rates/inflation, Warsh has recently become more open to rate cuts.

2. Changing Economic Views

• Past: Warsh opposed prolonged quantitative easing and favored a smaller Fed balance sheet to avoid inflation risks.
  • “He does have this track record of being an inflation hawk. But…as he's been in the mix for Fed Chair, has really embraced this idea that… the Fed can be cutting interest rates.” — Amera Amokwe [02:09]
• Present: Now argues for lower interest rates, citing productivity and economic factors. He calls for simultaneous balance sheet reduction and rate cuts.
  • Notable Quote: “The Fed has the policy mix exactly wrong. It has a big balance sheet, like we're in the 08 crisis or the 2020 pandemic, and has rates that are too high. It needs to shrink the Fed balance sheet and cut interest rates.” — Kevin Warsh (via Fox News, paraphrased) [02:23]

3. Political Dynamics and Fed Independence

• Trump’s Influence: Trump has aggressively pushed for rate cuts and challenged the Fed’s independence both publicly and behind closed doors.
  • Reporter: “Did Kevin Warsh commit to you that he will push to cut interest rates if he is confirmed?” — David Gura [02:50]
  • Trump reply (via journalist): “But we talk about it and I've been following him... He certainly wants to cut rates. I've been watching him for a long time.” — (paraphrasing Trump) [02:59]
• Concerns Over Fed Autonomy: The episode repeatedly highlights concerns that Warsh could prioritize presidential preferences over institutional independence.
  • “Is Kevin Warsh going to… push for policy that is aligned with what the President prefers?” — Amera Amokwe [03:25]
  • “If you're just seen as a sycophant who's just doing the president's bidding, that would likely rattle markets...” — Amera Amokwe [10:26]

4. Senate Confirmation Obstacles

• Current Legislative Blockage:
  • Sen. Thom Tillis (Senate Banking Committee) is blocking all Fed nominees until a DOJ investigation into Jerome Powell is resolved.
    • “Thom Tillis...has made clear that he is going to block any Fed nominee until this DOJ probe of Chair Powell and the Fed is resolved somehow.” — Amera Amokwe [13:47]
• Fed Independence as Focus of Confirmation Hearing:
  • Bipartisan skepticism about White House overreach, especially after legal attempts to remove current Fed Governor Lisa Cook and the DOJ probe into Powell.
  • “You are going to hear a lot of questions about Fed independence because the administration has really upped the ante in putting pressure on the Fed...” — Amera Amokwe [14:36]
  • Senator Warren frames the nomination as “Trump's latest attempt to seize control of the Fed.”

5. Why Warsh?

• Relationships & Trump’s Decision-Making: Despite past candidates (Kevin Hassett, Rick Reeder, Chris Waller), Warsh’s long-standing relationship with Trump influenced the final pick.
  • “A lot of the time, things just come down to relationships for Trump, who does he already know? And he didn't want to repeat the mistake. He did not know Jay Powell at the time of choosing him.” — David Gura [09:39]

6. Market and Policy Reactions

• Market Rally: Warsh’s nomination soothed markets due to his recognizability and perceived institutional knowledge.
  • “Yeah, we saw markets rally. Markets are happy with the choice. So far, it looks like it's someone who, as Trump said...the world of finance already knows well.” — David Gura [16:30]
• Fed Board Consensus: The Fed chair is only one vote out of twelve on the FOMC; Warsh's effectiveness hinges on building consensus—a skill for which Jay Powell was praised.
  • “...no Fed chair can push through rate cuts on his own.” — Amera Amokwe [19:53]

7. Potential Future Scenarios

• Powell’s Fate: The ongoing DOJ probe has clouded Powell’s future as Fed chair and may influence the transition timeline.
  • “The DOJ probe is kind of the bigger issue. It's bigger than who the next Fed chair is. It's really what is going to happen with that investigation that I think will ultimately determine whether Chair Powell stays or goes.” — Amera Amokwe [15:32]
• Warsh’s Challenge: Even if confirmed, Warsh will need to demonstrate independence, gain FOMC support, and avoid market disruption by balancing administration demands with sound economic reasoning.

Notable Quotes & Memorable Moments

• Trump’s Wink-and-Nod to Rate Cuts [02:59]:
  “But we talk about it and I've been following him and I don't want to ask him that question...But he certainly wants to cut rates.”

• Institutional Change Advocated [07:04]:
  “[Warsh] has continued to talk about how he thinks the Fed's balance sheet policies have gotten sort of out of hand...We heard Kevin Warsh over the summer basically say that there needs to be regime change at the Fed and institutional change at the Fed.”

• Senator Tillis’s Red Line on Confirmation [13:47]:
  “Thom Tillis...has made clear that he is going to block any Fed nominee until this DOJ probe of Chair Powell and the Fed is resolved somehow.”

• Essence of Fed Leadership [17:27]:
  “The Fed chair is just one, one of 12 people who votes on monetary policy...no Fed chair can push through rate cuts on his own.”

Timeline of Key Segments

| Timestamp | Segment/Topic | |------------|---------------------------------------------------------------------------------------------| | 01:02 | News: Trump picks Kevin Warsh as next Fed Chair | | 02:09 | Warsh's hawkish reputation vs. dovish recent rhetoric | | 02:23 | Warsh on Fox News: critique of Fed’s current policy | | 03:25 | Questions about Warsh’s independence, administration influence | | 04:28 | Warsh's background and Fed experience | | 05:11 | Résumé assessment and what it signals | | 06:50 | Warsh’s resignation, opposition to post-crisis quantitative easing | | 07:04 | Alignment with Treasury Secretary Besant’s criticisms | | 08:23 | Trump’s rationale for choosing Warsh in 2026 vs. 2017 | | 09:39 | Political calculations behind the pick, Trump’s relationships matter | | 11:01 | Transition/confirmation process and Senate obstacles | | 12:53 | Congressional skepticism and the politicization of the Fed | | 13:47 | Sen. Tillis blocking nominee over DOJ probe | | 14:36 | Bipartisan questions on Fed independence in confirmation hearings | | 15:32 | How ongoing investigations affect Powell’s and Warsh's futures | | 16:30 | Market reaction post-nomination | | 17:27 | Power dynamics of the FOMC; need for consensus building | | 19:53 | Importance of FOMC votes, challenge facing any Fed Chair |

Conclusion

The episode offers essential context on why Kevin Warsh’s nomination is momentous and controversial. His shifting views on monetary policy, alignment with influential administration figures, and the political and legal turmoil embroiling the Fed raise vital questions. As the Senate confirmation looms, the future of the Fed’s independence, market stability, and U.S. monetary policy hang in the balance.