5 questions about Trump’s Federal Reserve chairman nominee

1. Who did President Trump nominate to lead the Federal Reserve?

Mr. Trump nominated Kevin Warsh, 55, to serve as chairman of the Federal Reserve on Friday. Mr. Warsh previously served on the Fed’s board of governors from 2006 to 2011, where he acted as the Fed’s liaison to Wall Street during the financial crisis. He was the youngest Fed governor ever when appointed by President George W. Bush at age 35.

2. Why does Mr. Trump think Mr. Warsh is the right choice for this position?

The president called Mr. Warsh reliable and straight out of “central casting,” citing his deep resume and Wall Street pedigree. More importantly, Mr. Warsh’s recent views on interest rates align with the president’s goals — he has called for “regime change” and lower interest rates at the Fed. Warsh now believes lower rates can be paired with deregulation and artificial intelligence to unleash productivity, though he was previously more hawkish on rate cuts during his earlier Fed term.

3. What does the Fed chairman do, and why does this nomination matter?

The Fed chairman leads the Federal Reserve, a powerful institution that sets monetary policy and interest rates that impact terms for savings, loans, and investments. Mr. Trump wants to reshape the Fed to take a bolder approach to cutting interest rates, and has criticized current Chair Jerome Powell, whose term ends in May, as “too late” in responding to economic conditions. The nomination represents Mr. Trump’s effort to install leadership more aligned with his economic vision.

4. What obstacles could block Mr. Warsh’s confirmation?

While Republicans will likely show deference to Mr. Trump’s pick given Mr. Warsh’s GOP resume, he could face sharp questions about Fed independence as Mr. Trump lobbies the central bank over policy. Additionally, Sen. Thom Tillis of North Carolina has pledged to block any Fed nominees until the Department of Justice resolves a criminal inquiry into cost overruns at a Fed renovation project in Washington, which currently involves Mr. Powell.

5. Who else was considered for the position?

Treasury Secretary Scott Bessent oversaw an interview process that narrowed candidates to four finalists. White House National Economic Council Director Kevin Hassett was considered the front-runner for a period, though Mr. Trump said he wanted to keep him in his current role. Fed Governor Christopher Waller and Rick Rieder, a top executive at BlackRock, were also on the short list, with Mr. Rieder favored on betting markets before his past Democratic donations and BlackRock’s “woke” investing policies potentially complicated his confirmation path.

Read more: Trump selects Kevin Warsh, former Fed governor, to lead the central bank