FX168 Financial News Agency (Asia-Pacific) reported on Friday (January 30) that Bloomberg News published an exclusive report stating that, according to sources familiar with the matter, the Trump administration is preparing for President Trump to nominate Kevin Warsh as the next Federal Reserve Chair.
(Original source: Bloomberg)
U.S. President Donald Trump said on Thursday that he plans to announce his nominee for the position of Federal Reserve Chair on Friday morning.
These individuals, who requested anonymity because the matter has not been made public, cautioned that no final decision has been made until Trump formally announces the nomination.
The White House and Warsh’s representatives did not immediately respond to requests for comment.
According to one source familiar with the matter, Warsh, a former Federal Reserve governor and one of four finalists on Trump’s list, visited the White House on Thursday.
Another source briefed on the discussions said that the former Fed governor left a deep impression on Trump.
Until last week, Kevin Hassett was widely considered a leading candidate for the role, but Trump indicated he may prefer to keep Hassett at the White House.
Notably, during his tenure as a Federal Reserve governor, his forecasts leaned hawkish, showing almost zero tolerance for inflation.
Market Reaction
Expectations that Warsh will become the next Federal Reserve Chair led to a further decline in U.S. stock index futures, while Treasury yields rose. The dollar spiked briefly, and precious metal prices plummeted.
The U.S. Dollar Index currently reached a high of 96.74. Spot gold fell to $5,146.90 per ounce, plunging $223 during the day.
(美元指数15分钟图 来源：FX168)
(Spot Gold 15-Minute Chart Source: FX168)
Prediction markets showed a significant surge in bets on Kevin Warsh’s selection earlier on Thursday.
Other candidates reportedly on the shortlist include Kevin Hassett, Chairman of the National Economic Council, Federal Reserve Governor Christopher Waller, and BlackRock Inc. executive Rick Rieder.
US Treasury yields rose on expectations that Kevin Warsh would become the next Federal Reserve Chair. The yield on the 10-year US Treasury note climbed by 3 basis points, while the 30-year yield jumped by 5 basis points.
Prediction markets are increasingly favoring former Federal Reserve Governor Kevin Warsh, who is seen as a more ‘hawkish’ contender. Polymarket data shows that as support for Rick Rieder wanes, Warsh’s probability of becoming the next Federal Reserve Chair rose above 80% on Friday.
Andrew Ticehurst, Senior Strategist at Nomura Australia Ltd. in Sydney, stated: ‘The market perception is that if Kevin Warsh becomes the Federal Reserve Chair, it would represent a relatively more traditional choice, less ‘dovish,’ which might result in fewer interest rate cuts.’
About Kevin Warsh
On Thursday evening, Trump, without naming names, ‘previewed’ the upcoming announcement, stating that the nominee would not be surprising and was a well-known figure in financial circles.
Trump said, ‘Many people think this could be someone who should have taken the position years ago.’
Warsh served on the Federal Reserve Board from 2006 to 2011 and had previously advised Trump on economic policy. If nominated and confirmed by the Senate, he will succeed Jerome Powell as the Federal Reserve Chair; Powell’s term ends in May.
This would mark the return of 55-year-old Warsh to a key position at the Federal Reserve. In 2017, Trump passed over Warsh in favor of Powell when choosing the Fed chair.
In recent months, Warsh has publicly advocated for interest rate cuts, aligning with the President’s stance, which contrasts with his long-standing reputation as an ‘inflation hawk.’
Trump has been seeking a candidate who is widely accepted by the markets and also supports his preference for faster and deeper interest rate cuts.
Earlier this week, the Federal Reserve decided to keep interest rates unchanged after implementing three rate cuts by the end of 2025.