According to insiders, President-elect Trump has proposed selecting financier Kevin Warsh as his Treasury Secretary, with an understanding that when Jerome Powell's term as Federal Reserve Chairman ends in 2026, Warsh may be nominated to lead the Fed.
Some insiders say that Trump discussed possible arrangements with Warsh at his private club Mar-a-Lago in Florida on Wednesday.
Warsh is a popular candidate to lead the Treasury, but as of Thursday evening, Trump had yet to decide who to choose for this key cabinet position. Insiders say that Trump is still weighing how to handle the vacancy for the Fed chair position and may not make a final decision until Powell's term ends in May 2026.
Some of these individuals say that Trump is considering appointing investor Scott Bessent to lead the National Economic Council, and if Warsh becomes Fed Chairman, Bessent would be nominated as Treasury Secretary later in his term.
Trump's aides often remind that he is prone to changing his mind. He may decide not to choose Warsh or Bessent for these positions, opting instead for one of the other most promising contenders to lead the Treasury, such as Apollo Global Management CEO Marc Rowan. In recent days, Trump has been privately discussing candidates for Treasury Secretary. Bessent, Warsh, and representatives of Trump's transition team did not respond to requests for comment.
Bessent has publicly argued that Trump should announce as soon as possible who he plans to choose as Powell's successor so that this 'shadow' chairman can try to undermine Powell, making him a lame duck.
According to one insider, during Wednesday's meeting, Trump asked Warsh about his past positions on tariffs. Warsh has been a critic of trade protectionist policies. In a 2018 op-ed in the Wall Street Journal, he suggested that Trump's tariff plan could lead to what he called American 'economic isolationism.'
Warsh wrote: 'Mr. Trump's mercantilist rhetoric may not merely be a negotiating strategy, but could signal the emergence of new tariffs and trade restrictions globally. Economic isolationism will cause significant harm to our economic growth prospects.'
Warsh was one of the candidates considered to lead the Federal Reserve during Trump's first term. Trump later chose Powell, but after the Fed raised interest rates, his views on Powell changed. For a long time, Warsh has been seen as a potential successor to Powell, and some of Trump's economic advisors had previously urged Trump to pick him for the position.
Warsh is a lawyer who began working in investment banking at Morgan Stanley in 1995 and joined the Bush administration as an economic advisor in 2002. In 2006, he became a governor of the Federal Reserve. At that time, he was the youngest confirmed governor on the board.
Trump claimed this August that as president, he should have more say over how the Federal Reserve sets interest rates. If implemented, this would contradict the long-standing convention that central banks enjoy political autonomy and can combat inflation through often unpopular rate hikes.
As early as 2018, Trump joked about firing Powell amid interest rate disputes. However, in an interview with Bloomberg this year, he stated that he would allow Powell to serve out his term, 'especially if I think what he’s doing is right.'
However, Warsh is a strong advocate of free trade principles, has warned against a significant increase in debt burdens, and supports the Fed's 'independence,' positions that are at odds with Trump's previous statements.
Article reposted from: Jinshi Data