The Fed Chair has been picked: Who is Kevin Warsh?

• President Trump surprised Markets with an early-morning nomination for a new Fed Chair
• Kevin Warsh will be replacing Chairman Powell in May 2026
• Discover his story, past accomplishments and Market effect

The US President finally gave his answer for who will be the next Federal Reserve Chairman of the Board.

Trump loves a good surprise. Just after announcing he would provide the decision next week, turns out he did so in the early morning through a Truth Social Post.

Kevin Warsh will be serving as the Chairman for the Fed for a first four-year term beginning in May 2026.

The announcement came with swift Market reactions – Gold and other metals are falling off a cliff, Stocks gapped lower in today's open and the Dollar is heading higher.

This definitely looks like "Sell the news" flows – the rest for traders will be to see if this continues or not.

We will dive into Mr Warsh's past endeavours, what he represents for the Federal Reserve and our expectations on the effect he should have on Markets.

Discover:

• Markets Today: European economies expand, gold and silver plunge as markets await Fed Chair announcement and PCE data
• Metals flashing red after record runs – Silver (XAG/USD), Gold (XAU/USD) and Copper (XCU/USD) Outlook
• Chart alert: Gold has formed a medium-term blow-off top below $5,600

Kevin Warsh’s career is a distinguished blend of high-level academia, private sector expertise, and public service.

He holds an A.B. in public policy from Stanford University and a Juris Doctor from Harvard Law School, where he focused on the intersection of law and economics – A clean, classic background for somebody who could run the Fed.

FYI, Powell also held a Law Degree.

Shortly after his completing his studies, Warsh distinguished himself at Morgan Stanley, where he served as Executive Director in the M&A department from 1995.

Warsh quickly became a specialist in structuring complex capital market transactions across diverse industries for the Financial Institution.

His competence for Markets caught the eye of the George W. Bush administration, leading to his appointment as Special Assistant to the President for Economic Policy in 2002 being only 32.

In 2006, Kevin got appointed at the Board of Governors at the Federal Reserve, being the youngest to reach the position, which drew some criticism.

Still, being well connected to Wall Street after his stay at MS, he quickly got accepted as "invaluable" for the Fed.

Warsh became Ben Bernanke’s (Fed Chair during the period) primary "emissary" to the financial world during the 2008 meltdown. His unique ability to speak the "language of the markets" made him the central bank’s most vital conduit to Wall Street CEOs and global regulators.

Just the fact that he remained at the Fed from 2006 to 2011 proves he was well-suited for the Job. It wasn't the easiest period in financial markets.

He also served as the Fed's representative to the G20 and for Emerging and Advanced economies of Asia before resigning in March 2011.

After his first stay at the Fed, Warsh transitioned into heavyweight intellectual roles in many establishments and foundations.

At the Hoover Institution, he became a prominent advocate for regime change in monetary policy, often criticizing the Fed’s long-term reliance on balance sheet expansion.

One of his most notable global achievements was an independent report, the Warsh Review, commissioned by the Bank of England which increased the Central Bank's transparency policy.

Fun fact, Canada's Prime Minister Mark Carney was the Bank of England's Governor during that period.

He also was part of the favorites to be the Fed Chair in 2018, but the first Trump Administration preferred to go towards safety with Jerome Powell (as he was still deemed too young for the position).

The new Fed Chair still kept close ties with the US President, taking us to today.

Let's now see what he represents for Markets and how it can affect the US Dollar and other assets.

This section can either age like Wine or Milk and will, of course, be subject to extensive reviews as his term commences and his first speeches as Fed Chair get delivered.

Kevin Warsh is not Wall Street's preferred choice (Rick Rieder held that role), but still represents Respect and Credibility for his role.

The Nominee was known for his relatively hawkish views towards the end of his first term at the Fed, notably getting named a "hard money hawk" by CNBC.

But being close to the Trump Administration, particularly today, implies sacrificing some of one's impartial judgment.

Kevin Warsh is an advocate for tax and regulatory reforms, so as long as Trump's fiscal policies aren't too extreme, he should stay mostly in line with the President.

Something positive for the US Dollar and fiat currencies in general is that Warsh tends to be a realist rather than a dove-maximalist. He did express his discontent with the second round of Quantitative Easing.

A good place to look for Market reactions to his credibility regarding the Dollar is the Dollar itself.

The DXY (Dollar Index) has been strengthening again after the pre-FOMC super-tumble. As long as the Index remains below 97.00, it could just be classical mean-reversion. For now, the rebound looks solid.

Stock Indexes have opened lower but I wouldn't take this as a red flag.

Stocks did rise after the FOMC meeting and despite yesterday's selling session, benchmarks rebounded and largely remain close to their all-time highs.

What you are seeing today is the result of profit-taking ahead of a high-risk weekend (Iran, or more Trump Admin madness anywhere else).

If Warsh follows Trump's demands, he should help Equities to rise on the long-run. The President loves to base his own performance looking at Markets for those who did not know, so Trump surely will push for his nominee to do the same.

The rest will of course also depend on the US Economy and global risk-appetite (and lack of any major Crisis).

Regarding Fiat currency credibility, it will be tough to say.

Kevin Warsh isn't the favored candidate to reduce the Fed's Balance Sheet – So that's about that for Fiscal reduction concerns.

Still, his realistic views may help with the recent Debasement Trade trends, part of the reason why we saw steep profit-taking around Metals today.

The yield curve is also steepening further, with the shorter-term yields (3M to 5Y) going lower while the long end (10Y and more) is rising – Implying pricing for more cuts today and more inflation later.

This is a repricing for further dovishness from the Trump-nominee, not seen as such a Yes-Man as Kevin Hassett, but also not a candidate who will stand up to the President like Powell.

For the rest, time will tell.

Risk-appetite is looking timid amid the past two years of relentless rallies across asset classes and geopolitical instability.

His first address, particularly his first Press Conference as Fed Chair (June 17, 2026), will be quintessential for Markets.

Jerome Powell will surely go down as one of the most popular Fed Chairs.

Known as a Market stabilizer, Powell would always push for the lowest volatility outcome over his 8 years as Fed Chair, may it be through the first rounds of post-Great Financial Crisis rate tightening in 2018-2019 or the quick U-turn towards zero-rate policies the year after, as COVID struck hard.

Even when Participants thought he was a dove, he did not hesitate to show his hawkish wings during the 2022 hiking cycle and maintained that tone until inflation abated.

He was a Swiss Army knife at the head of the most important central bank and held his role with righteousness—a very talented speaker who always knew how to shapeshift curve balls and tricky questions during press conferences. Or even attacks from his President.

Markets will surely miss Jerome Powell as Fed Chair – now we'll see if he wants to stay on the Board of Governors, with his term still valid until January 31, 2028.

He will also be remembered for years of good memes.

I'm part of Generation Z, so this one is a bit more personal.

Safe Trades and wishing good luck to Kevin Warsh (and the Financial System)!

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