Washington: In a significant development in U.S. economic policy, President Donald Trump’s top economic adviser, Kevin Hassett, has publicly endorsed Kevin Warsh as a strong candidate to lead the Federal Reserve. Speaking to CNBC, Hassett described Warsh as an “excellent pick” to replace current Fed Chair Jerome Powell, whose term is set to expire in May. The endorsement comes at a critical time when political debates over the independence and leadership of the U.S. central bank are intensifying.
Hassett, who was himself considered a potential candidate for the Fed chairmanship, emphasized that he harbors no personal disappointment over not being chosen. He noted that Warsh brings deep experience and institutional knowledge, positioning him to guide the central bank through complex economic challenges. Hassett refrained from outlining specific monetary policies, stating that those discussions will be handled directly by Warsh if confirmed.
However, Warsh’s confirmation faces hurdles. A Department of Justice investigation into the Fed’s spending on a recent major building renovation has raised questions that some lawmakers believe could affect the nominee’s approval. Senator Thom Tillis indicated that confirmations might be delayed until legal issues surrounding the Fed are fully resolved, sparking concerns about potential leadership gaps at the central bank during a sensitive economic period.
The nomination has also stirred market reactions. Investors have shown signs of nervousness, with bond yields and stock market volatility increasing amid uncertainty about the Fed’s future policy direction. Analysts warn that any delays in confirmation could affect confidence in the central bank’s independence and its ability to manage inflation and economic growth.
Warsh, a former Fed governor and Hoover Institution fellow, is widely regarded as a policy-savvy insider. Supporters highlight his experience and knowledge of Federal Reserve operations, while critics caution that his close alignment with the White House could compromise the institution’s long-standing independence. Economists have noted that Warsh may be more open to policies favored by the Trump administration, including potential interest rate adjustments aimed at stimulating economic growth.
As the Senate prepares for confirmation hearings, political divisions are evident. Republican support for Warsh remains strong, but Democrats and moderate Republicans have voiced concerns over central bank independence. Observers note that a prolonged confirmation process could leave the Fed without clear leadership at a crucial time, complicating monetary policy decisions and potentially affecting U.S. and global markets.
Despite these challenges, Hassett underscored the administration’s commitment to ensuring a smooth transition and securing Warsh’s approval. His public support signals the White House’s determination to influence the direction of U.S. economic policy, even as institutional and political obstacles loom.