Who Is the New Fed Chair?

Summary

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The Journal. — “Who Is the New Fed Chair?”

Date: January 30, 2026
Hosts: Jessica Mendoza & Ryan Knutson
Guest: Nick Timiros (Federal Reserve reporter, WSJ)

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Episode Overview

In this episode, The Journal examines President Trump's pivotal decision to appoint Kevin Warsh as the new Federal Reserve Chair. The hosts and guest Nick Timiros delve into Warsh’s career, ideology, and what his leadership could mean for the direction of U.S. monetary policy, especially given the political backdrop and economic uncertainties facing the Fed.

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Key Discussion Points & Insights

1. The Announcement & Selection Process

• President Trump's Announcement: Kevin Warsh will be the next Chair of the Federal Reserve (00:16).
  • The selection process was described as drawn out and theatrical, likened to "The Apprentice: Fed Edition," with many candidates whittled down to four (00:26).
  • Many analysts had expected Warsh would get the role, so while there was intrigue, the outcome surprised few insiders (00:41).

Notable Quote:

• Nick Timiros: “It was like an episode of his old TV show, The Apprentice. I called it the Apprentice Fed Edition because he had everybody sort of guessing.” (00:26)

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2. Who Is Kevin Warsh?

• Background:
  • 55 years old, upstate New York native, educated at Stanford (BA) and Harvard (JD), former Morgan Stanley banker (02:32).
  • Married Jane Lauder (Estee Lauder heiress); father-in-law Ron Lauder is Trump's former classmate (02:42).
  • Appointed as a Fed Governor at age 35 (the youngest ever), after working in the George W. Bush White House (03:38).
• Reputation:
  • Once seen as a Washington and Wall Street rising star, Warsh became a prominent Fed critic after his term ended in 2011.
  • Transitioned from establishment Republican to vocal Trump supporter (01:00).

Notable Quote:

• Nick Timiros: “Kevin Warsh is a Fed insider turned critic. He is an establishment Republican turned Trump supporter.” (01:00)

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3. Warsh’s Views on Monetary Policy & Inflation

• Experience during Crisis:
  • Warsh had a "ringside seat" during the 2008 financial crisis, initially supporting quantitative easing before growing concerned about its long-term effects (03:58–04:19).
  • After leaving the Fed, he warned easy money policies could cause inflation or asset bubbles (04:19).
• Critique of the Fed:
  • Warsh frequently wrote op-eds and gave interviews warning about the risks of prevailing Fed policies (04:19, 04:48).
  • He’s argued that the Fed’s commitment to economic models (linking growth, jobs, and inflation) is misguided, and has promoted more open debate within the institution (07:32–08:32).

Notable Quotes:

• Kevin Warsh: “Bad economic policy provokes our adversaries to take us on, so that makes the country less prosperous and less peaceful.” (04:48)
• Kevin Warsh: “What the Fed needs is more robust discussion of ideas, less groupthink.” (08:32)

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4. Warsh’s Relationship with Trump & Previous Fed Chair Selection

• 2017 Chair Selection:
  • Warsh was a finalist in Trump’s first term, but the role went to Jerome Powell due to Trump’s concerns about Warsh’s stance on interest rates and his youthful appearance (05:17).
  • Trump preferred someone "who favors low interest rates" and saw Powell as a better fit at the time (05:17–06:07).
• Evolution of Views:
  • Warsh became more vocal in favor of cutting rates, especially after 2021 when inflation surged and he criticized Powell’s handling of the situation (06:25).

Notable Quote:

• Nick Timiros (on Trump’s criteria): “I want somebody who favors low interest rates… Trump saw the long track record, the written record that Warsh had published, and said, well, maybe this guy doesn’t actually want lower interest rates.” (05:17)

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5. Warsh’s Expected Policy Approach

• Rate Cuts Expected:
  • Warsh has signaled support for rate cuts, particularly as inflation has recently stabilized (06:57–07:10).
  • He opposes the “slavish devotion” to traditional economic models within the Fed (07:32–08:23).
  • Recent WSJ op-ed stated that with better Fed leadership, the economy could boom (07:32).
• Dissent from Fed “Orthodoxy”:
  • Warsh is likely to seek reforms intended to foster growth and reduce inflation, challenging standard central bank groupthink (08:23–08:38).

Notable Quote:

• Kevin Warsh (on Fox News): “…I think [the Fed’s] track record is really quite poor in forecasting the growth of the economy from policies like the ones the President put in place.” (07:10)
• Nick Timiros: “A lot of analysts expect Warsh will push for some interest rate cuts once he takes over as Fed chair.” (07:32)

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6. Image, Presentation, and Trump’s “Central Casting” Mentality

• Trump praised Warsh’s appearance and “central casting” qualities (08:57), suggesting looks and presentation factored into the decision.
  • Warsh now has a more seasoned, “dignified” look versus when he was passed over in 2017 (09:17–09:23).

Memorable Moment:

• Nick Timiros: “You know, Kevin Warsh wears these very well-tailored suits that don’t require a belt. He definitely comes out of central casting. Trump is right about that.” (09:23–09:36)

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7. The Economic Challenge Ahead

• Warsh will face:
  • Slowing job growth, underlying causes uncertain (immigration, structural factors) (09:42)
  • Persistent inflation above the Fed’s 2% target for six years (09:42)
  • Uncertainty over the impact of AI on the labor force (09:42–10:38)
  • Potential need for new approaches to monetary policy as economic realities shift (09:42–10:38)

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8. The Politicized Confirmation Process & Fed Independence

• Confirmation expected due to GOP Senate majority, but Senator Thom Tillis vows to block nominations until a DOJ probe into outgoing Chair Powell is resolved (11:24–12:16).
• Lawmakers from both parties express concern the investigation is an attempt to undermine Fed independence.
• Warsh’s own views on Fed independence have shifted over time:
  • In 2010, he gave strong speeches in favor of an independent Fed.
  • Recently, he’s dismissed concerns about presidential pressure (12:49–14:08).

Notable Quotes:

• Nick Timiros (on Warsh's shifting stance): “So Warsh's view is different today from what it was 15 years ago. And a lot of people I talk to have questions about, well, which Kevin Warsh shows up at the Fed?” (12:49–14:08)

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9. What Will a Warsh Fed Look Like?

• Warsh is promising a "complete disruption" and “regime change” at the Fed, both in policy and in how the bank operates internally (14:15–14:37).
• Unanswered questions:
  • How will asset holdings be managed?
  • Will Warsh overhaul Fed staffing and staffing philosophy?
  • Will significant change come fast, or be slowed by the Fed's consensus-based structure?
  • Timiros likens the Fed to an aircraft carrier—it can turn, but not on a dime (15:06–15:12).

Notable Quotes:

• Kevin Warsh: “That means regime change in how we're thinking about inflation, how we're conducting policy, how we're communicating. It's also regime change in terms of how we're supervising and regulating banks.” (14:28)

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10. Looking Forward

• New uncertainty begins: instead of “Who will Trump pick?” now the focus is “What is Warsh actually going to do?”
• Trump's explicit demand for a chair who will deliver low rates sets up a more openly politicized relationship with the White House (15:45–16:40).

Notable Quote:

• Nick Timiros: “There is never a dull moment on this beat right now.” (16:43)

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Most Memorable Quotes (Speaker & Timestamp)

• “Kevin Warsh is a Fed insider turned critic. He is an establishment Republican turned Trump supporter.”
  — Nick Timiros (01:00)
• “What the Fed needs is more robust discussion of ideas, less groupthink.”
  — Kevin Warsh (08:32)
• “I have no doubt he’ll go down as one of the great Fed chairman, maybe the best. And then he added this line … On top of everything else, he is central casting.”
  — Nick Timiros on Trump’s remarks (08:57)
• “You know, the Fed is like an aircraft carrier. It can turn, but it can’t turn on a dime. There are 11 other people who are going to vote on interest rates. Warsh is going to have to build a consensus with his colleagues, and that’s going to take time.”
  — Nick Timiros (15:12)

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Important Timestamps

• 00:16 — Announcement: Kevin Warsh named as Fed Chair
• 01:00 — Overview: Warsh’s political evolution
• 03:38 — Warsh’s Fed board appointment
• 04:19–04:48 — Warsh’s post-2011 critique of the Fed
• 05:17 — 2017 Chair selection and Trump’s rationale
• 06:25 — Warsh’s change in rhetoric regarding monetary policy
• 07:10 — Warsh on Fox News about Fed’s track record
• 08:32 — Warsh on the need for more open debate at the Fed
• 08:57 — Trump’s “central casting” remarks
• 09:42 — Economic problems Warsh will inherit
• 11:24 — Senate confirmation complications due to Powell investigation
• 12:49 — Warsh’s changing stance on Fed independence
• 14:28 — Warsh’s “regime change” quote
• 15:06 — Timiros uses aircraft carrier analogy

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Final Thoughts

Kevin Warsh’s nomination to helm the Federal Reserve marks a potential turning point both in policy direction and the relationship between the central bank and the executive branch. The episode delivers a rich portrait of Warsh's career and worldview, while underscoring the major economic and political uncertainties he will face as Chair—including his Senate confirmation, Fed independence questions, and the challenge of forging consensus in an uncharted economic landscape.

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Transcript

[Jessica Mendoza]

This morning, President Trump made a huge announcement, one that could impact the economy for years to come. What's the big news today, Nick?

[Nick Timiros]

Well, the big news is that Kevin Warsh will be the next Fed chair.

[Jessica Mendoza]

Our colleague Nick Timiros covers the Federal Reserve.

[Nick Timiros]

We've been waiting for months, really. It was really, you know, a pageant. It was like an episode of his old TV show, the Apprentice. I called it the Apprentice Fed Edition because he had everybody sort of guessing. They started with 11 candidates and then they whittled it down to four. They got to interview with Trump and there was some swirl of intrigue this week. But in fact, the person that Donald Trump picked, Kevin Warsh, is the person that a lot of people thought was going to get it from the very beginning.

[Jessica Mendoza]

And what do you make of this choice? Kevin Warsh?

[Nick Timiros]

Kevin Warsh is a Fed insider turned critic. He is an establishment Republican turned Trump supporter.

[Kevin Warsh]

This isn't the first time you've heard me in the last decade say we need regime change at the Fed.

[Nick Timiros]

It's not just about he spent five years at the Central bank beginning 20 years ago, so he knows the Fed. But he's also been a vocal advocate for recently for Donald Trump's policies. The question I think a lot of people on Wall street are going to ask in the coming days and weeks is which Kevin Warsh ends up being the Fed chair.

[Jessica Mendoza]

Welcome to the Journal, our show about money, business and power. I'm Jessica Mendoza. It's Friday, January 30th. Coming up on the show, Kevin Warsh and a new era at the Federal Reserve.

[Ryan Knudson]

Hey, it's Ryan. Thanks for being a listener to our show. If you're looking for more deeply reported stories like the ones we share every day, consider becoming a subscriber to the Wall street journal. Visit subscribe.WSJ.com thejournal to subscribe now.

[Jessica Mendoza]

Kevin Warsh is 55 years old, originally from upstate New York. He got his bachelor's degree from Stanford University where he made connections in conservative economic circles.

[Nick Timiros]

And he was seen as just a very brilliant up and comer. He married Jane Louder, an heiress to the Estee Lauder family fortune. His father in law is Ron Louder, who is a former classmate of Donald Trump's.

[Jessica Mendoza]

Warsh also got a law degree from Harvard and worked as a banker at Morgan Stanley.

[Nick Timiros]

And in 2002, there is an economic advisor at the White House who calls up one of Warsh's old professors and says, hey, I need to hire a really smart, hard working person. Have you got anybody and the economist professor says to the White House advisor, I've got the guy, he's brilliant. And that was Kevin Warsh.

[Jessica Mendoza]

While working in George W. Bush's White House, Warsh got to know economist Ben Bernanke, who went on to lead the Federal Reserve.

[Nick Timiros]

And from that, he scores an appointment to the Fed board himself. In 2006, at age 35, he became the youngest person ever to become a Fed governor.

[Jessica Mendoza]

Here's Warsh at a Federal Reserve board meeting in 2007.

[Kevin Warsh]

You've done it with a rigor that I think is quite representative of the Federal Reserve.

[Nick Timiros]

And then he has a ringside seat to the financial crisis in 2008.

[Jessica Mendoza]

During that period, one of the most significant moves the Fed made was something called quantitative easing, buying treasury bonds to stabilize the economy. Initially, Warsh was on board with the policy, but by the time he left the Fed in 2011, he had his doubts.

[Nick Timiros]

He is disillusioned with some of the easy policies that Bernanke is pursuing. And so he becomes more critical of the Fed after he leaves. The worry was that all of the money sloshing around in the economy would show up either in inflation or asset bubbles. Warsh writes regular essays, op eds, gives interviews where he's pointing out what he thinks are the problems with the policies the Fed is pursuing.

[Kevin Warsh]

Bad economic policy provokes our adversaries to take us on, so that makes the country less prosperous and less peaceful.

[Jessica Mendoza]

Warsh's concerns drew a lot of attention, including from President Trump, who in 2017, during his first term, was choosing a new Fed chair. The choice came down to Warsh and Jerome Powell. Ultimately, Trump chooses Powell. Why didn't Trump choose war at the time? What was sort of the idea there?

[Nick Timiros]

Well, I talked to somebody who spoke with the president right as Trump was making that decision. And this was somebody who said, I think you should pick Kevin Warsh. And the President said, well, I want somebody who favors low interest rates. So I think one way to read this is to say Trump saw the long track record, the written record that Warsh had published, and said, well, maybe this guy doesn't actually want lower interest rates. He also told people he thought Warsh looked too young. Warsh is 17 years younger than Powell, the silver haired former private equity investor. And so even though Warsh was very well positioned, Trump saw Powell, saw somebody who had supported the lower interest rate policies of the previous years. And so he went with Powell.

[Jessica Mendoza]

But things didn't go as Trump expected. Powell gradually raised interest rates starting in 2018, and Trump made His displeasure with Powell public. During Trump's second term, Powell his frustration reached a boiling point. Meanwhile, Warsh had become more vocal about lowering rates.

[Nick Timiros]

Warsh flipped and said the Fed didn't need to raise interest rates anymore. He began to be more critical of the policies Powell pursued, and that was especially true in 2021, when inflation became a more evident problem. Warsh again said, you shouldn't be purchasing all these securities. You're going to drive up inflation. And he was right.

[Jessica Mendoza]

In the past few years, one of the main sticking points between Trump and Powell has been interest rates, as you've said, Trump has said he wants rates as low as 1%. What has Walsh said about that?

[Nick Timiros]

Kevin Warsh hasn't spoken publicly, to my knowledge, since an appearance on Fox News at the end of October, when he said, yes, the Fed should cut interest rates.

[Jessica Mendoza]

Here's WARSH Speaking with FOX's Maria Bartiromo.

[Kevin Warsh]

And given the fact that inflation is still pretty tame, should they be doing a string of cuts into 2026? Yeah, well, I think they've made a series of mistakes, not just in the last year, but the last five or six years. And I think their track record is really quite poor in forecasting the growth of the economy from policies like the ones the President put in place.

[Nick Timiros]

He had an opinion piece in our pages in November where he said the economy was poised to boom if only the Fed had better leadership. A lot of analysts expect Warsh will push for some interest rate cuts once he takes over his Fed chair. Warsh has criticized the models and the framework that the Fed uses. He thinks the PhD economists have sort of been slaves to these models that say if the economy grows faster and more people have jobs and their wages go up, that that's going to create inflation. Because for a lot of economists, that is sort of the main model they have for the inflation generating process. And Warsh says that's really not how it works at all. And you don't need to worry so much about it.

[Jessica Mendoza]

What Warsh is concerned about is a Federal Reserve that is an obstacle to economic growth because it's entrenched in its own ways. He talked about this in a podcast interview last year.

[Kevin Warsh]

What the Fed needs is more robust discussion of ideas, less group think.

[Jessica Mendoza]

And in an op ed for the Wall Street Journal in November, Warsh wrote that reforming monetary policy at the Fed would lead to a stronger economy and lower inflation. And so when Trump announced his pick, what did he say when he decided finally that it was Warsh?

[Nick Timiros]

Trump said, I've known Kevin for a long period of time, I have no doubt he'll go down as one of the great Fed chairman, maybe the best. And then he added this line, which is vintage Trump. On top of everything else, he is central casting. Trump cares about the look. You have to have the look that Donald Trump wants. Handsome.

[Jessica Mendoza]

He's kind of aged into his dignified look. He was too young in 2017.

[Nick Timiros]

He's gotten maybe a few more gray hairs at the temples, that sort of thing. You know, Kevin Worsh wears these very well tailored suits that don't require a belt. He definitely comes out of central casting. Trump is right about that.

[Jessica Mendoza]

What are some of the bigger economic problems that Warsh will need to deal with as Fed chair?

[Nick Timiros]

Well, so he inherits an economy that has been doing okay on the surface, but job growth has slowed a lot. And there's a big mystery there. Is it slowing because we have less immigration? Is that a problem that we're not adding a lot of jobs? If the unemployment rate is staying stable, the Fed is now entering its sixth year with inflation above its 2% goal. And if you say you're going to meet a goal and you go for many years without hitting it, does that erode your credibility? And then apart from that, there are just enormous questions over what effect AI is going to have on the labor force. And what can a central bank that raises interest rates to deal with a normal business cycle do if you're entering some sort of big structural shift?

[Jessica Mendoza]

But before Warsh can face those economic challenges, he'll have to face Senate confirmation. That's next.

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[Jessica Mendoza]

Kevin Warsh is likely to be confirmed by the Senate to be the country's new Fed chair, since Republicans have a majority. But there's at least one wrinkle ahead. The current Fed chair, Jerome Powell, is currently under criminal investigation by the Department of Justice related to the renovation of the Federal Reserve building. Powell has denied any wrongdoing. The investigation has lawmakers from both parties worried. They say it looks like an attempt to interfere with the independence of the Fed.

[Nick Timiros]

One in particular, Thom Tillis, a Republican senator from North Carolina has said he will not vote for any Fed confirmation until this whole probe is resolved. And he repeated that view on Friday morning after Trump's announcement.

[Kevin Warsh]

We've got the Cook case and we have the Powell case. Both of those, to me, are instances of trying to undermine the credibility of the Fed independents.

[Nick Timiros]

And he said, warsh is qualified, but my vow still stands. I'm not going to move any Fed nominees until this probe gets resolved. And so it seems very likely now that the White House and the Department of Justice are going to have to deal with this here, because otherwise it's possible that they just won't get the new Fed chair confirmed by May.

[Jessica Mendoza]

So, Senator Tillis, concern here is about Fed independence. What do we know about how Warsh feels about that?

[Nick Timiros]

Well, so more recently, Warsh has sort of pooh poohed or waved away concerns from the central banking priesthood that says, you really shouldn't have a president attacking the Fed in this way. It shakes markets confidence that the Fed's gonna be allowed to do its job. And Warsh has not joined in sort of the concerns about Fed independence. But when Warsh was a fed governor in 2010, Warsh gave a speech, an ode to Fed independence. And he said very clearly, if central bankers care about anything, they should care about how history will remember them. And you cannot have a White House that's calling the shots. So Warsh's view is different today from what it was 15 years ago. And a lot of people I talk to have questions about, well, which Kevin Warsh shows up at the Fed? Is it the one who was very worried and kind of took the standard central banker line on fed independence in 2010? Or is it the one who last year sort of waved away the concerns about Trump's attacks and said, the Fed has sort of brought a lot of this on itself?

[Jessica Mendoza]

Given everything swirling around Warsh's appointment, how would you describe this moment of transition for the Fed?

[Nick Timiros]

This will be the most unusual Fed transition in generations. Kevin Warsh is promising complete disruption. He's gone on Fox News calling for regime change.

[Kevin Warsh]

That means regime change in how we're thinking about inflation, how we're conducting policy, how we're communicating. It's also regime change in terms of how we're supervising and regulating banks.

[Nick Timiros]

But still, it now means there are questions about, well, what's the Fed going to do with their asset holdings? Could they do something completely different? What's he going to do with the Fed's staff? Is he going to fire a bunch of economists? Because, you know, we really don't need all these guys anymore. Those are some questions we're going to get answers to, not right away, but certainly as the year unfolds.

[Jessica Mendoza]

So it sounds like we're not going to know how much things are going to change at the Fed, like, immediately.

[Nick Timiros]

Here's how you should think about it. You know, the Fed is like an aircraft carrier. It can turn, but it can't turn on a dime. There are 11 other people who are going to vote on interest rates. Warsh is going to have to build a consensus with his colleagues, and that's going to take time. You don't just come in and snap your fingers and everything's going to change. So it's very possible that four years from now, when we look back at the Warsh Fed, we'll say, yeah, they did change direction, but I would be very surprised if it's something that happens right away.

[Jessica Mendoza]

So, Nick, what are you watching out for next?

[Nick Timiros]

Well, we've ended one bout of uncertainty over. All right. Who is Donald Trump actually going to pick to lead the place? And now we have a new round of uncertainty, which is how is the new chair going to settle into the job? Powell has faced a lot of challenges in dealing with the White House and Trump during the last year. Warsh could have it worse. And the reason is because when Powell took the job, there wasn't any explicit expectation that he was going to try to get the President the interest rate policy the president wanted. That wasn't a part of the conversations at all. But it is now. It's very explicit. I am going to pick somebody who will do what I want on interest rates. So how does that unfold?

[Jessica Mendoza]

Well, sounds like there's going to be a lot to keep you busy in the coming months.

[Nick Timiros]

There is never a dull moment on this beat right now.

[Jessica Mendoza]

That's all for today. Friday, january 30th. Additional reporting in this episode by matt grossman. The journal is a co production of Spotify and the wall street journal. The show's made by kathryn brewer, pia ghidkari, isabella japal, sophie codner, ryan knudson, matt kwong, colin mcnulty, annie minoff, laura morris, enrique perez de la rosa, sarah platt, allen rodriguez espinosa, heather rogers, pierce singhy, jeeva kaverma, lisa wang, catherine whalen, tatiana zamis and me, jessica mendoza. Our engineers are griffin tanner, nathan singapok and peter leonard. Our theme music is by so wiley. Additional music this week from peter leonard, bobby lord, emma munger, nathan singapak, griffin tanner audio network and blue dot sessions. Fact checking this week by mary mathis. Thanks for listening. See you on Monday.