President Trump selects Kevin Warsh as new Federal Reserve chair

President Donald Trump on Friday announced Kevin Warsh as his choice to chair the Federal Reserve, to replace the outgoing leader Jerome Powell when his term ends in May, pending Senate confirmation. Markets have reacted slightly positively to the news, with both gold and bitcoin gaining 0.5% after a cold start to Friday morning.

POTUS Trump announced his nominee on Truth Social, saying Warsh would be nominated to both serve on the Federal Reserve Board and become its next chair. 

The 55-year-old banker is a former Fed official with Wall Street experience and a profile investors are well aware of. His selection ends weeks of speculation over who would lead the central bank, as the current administration continues to press Powell on interest rate policy.

US dollar trends upwards, crypto and gold markets still struggle

After Trump made his announcement, the initial response in financial markets saw the US dollar strengthen against other currencies, while yields on the 10-Year Treasury bonds climbed. 

However, gold futures were down 4.1% at $5,177 per ounce, while spot gold had retreated 3.9% from its intraday highs to $5,152 at the time of this publication. The metal logged its largest daily market capitalization swing on record, according to market data tracked by the Kobeissi Letter.

Between 9:30 AM and 10:25 AM Eastern Time on Thursday, gold had shed $3.2 trillion in market value, equating to losses of about $58 billion per minute. From 10:25 AM to 4:00 PM, it regained $2.3 trillion in value, more than three times Bitcoin’s market capitalization over 6.5 hours.

In the early Friday Asian trading hours, bitcoin was consolidating near $82,300. A Fed news-inspired market has pushed the coin above $83,000, though that level is still 5.5% below its value 24 hours ago. All eyes will be on the $80,000 level, following the king coin’s slip below the neckline of a head and shoulders formation on the daily chart. That breakdown implies a possible 12% further decline from the neckline to $75,000 if selling pressure returns. 

Meanwhile, stock markets outside the United States traded unevenly during the early trading hours. Germany’s DAX rose 0.8% to 24,506.41. Paris’s CAC 40 gained 0.4% to 8,107.50. Britain’s FTSE 100 edged 0.2% higher to 10,189.05.

In Asia, Hong Kong’s Hang Seng index fell 2.1% to 27,387.11, the Shanghai Composite index declined 1% to 4,117.95, and Japan’s Nikkei 225 slipped 0.1% to 53,322.85 as artificial intelligence-linked stocks retreated. 

Kevin Warsh expected to solidify Fed independence

Kevin Warsh was part of a shortlist that included Rick Rieder of BlackRock, Fed Governor Christopher Waller, and National Economic Council Director Kevin Hassett. David Bahnsen of The Bahnsen Group believes not much will change at the central bank if Warsh gets the Senate’s greenlight.

“He has the respect and credibility of the financial markets. There was no person who was going to get this job who wasn’t going to be cutting rates in the short term. However, I believe longer term he will be a credible candidate,” Bahnsen told CNBC.

President Trump had nominated Powell during his first term, then former President Joe Biden later renominated Powell for another term, Cryptopolitan reported. Yet, tensions between Trump and Powell have been public for years. Trump repeatedly bashed the current Fed chair for not lowering interest rates, even after the Fed cut rates three times late in 2025. 

The path to Warsh’s confirmation may be a bumpy one, as some lawmakers, like Republican Senator Thom Tillis, vowed to block Trump’s Fed nominees until the Justice Department probe on Powell for perjury concludes.

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