Trump reportedly preparing to nominate former Fed Governor Kevin Warsh as next Fed Chair

Summary

Reports indicate that the Trump administration is preparing to nominate former Federal Reserve Governor Kevin Warsh as the next Fed Chair, with a potential announcement as soon as Friday. This development follows a period of intense public pressure from President Trump on the current Fed for rate cuts and criticism of Chair Jerome Powell.Sina Finance+ 3 Warsh had been considered a front-runner, with his chances reportedly increasing after another potential candidate, Kevin Hassett, appeared to fall out of favor.AnueSec+ 3 The news of Warsh’s potential nomination has led to a rise in U.S. Treasury yields and a drop in gold prices. However, the nomination could face significant political hurdles in the Senate.Wallstreetcn

Impact Analysis

So Trump’s finally making his move on the Fed. He’s reportedly tapping Kevin Warsh, and the market’s reaction is telling: Treasury yields jumped and gold dropped. This is the interesting part—Trump has been screaming for rate cuts for months,Sina Finance but the market sees his potential nominee and immediately prices in a more hawkish or at least more uncertain path. This isn’t about Warsh’s specific views; it’s a chaos premium. The market is reacting to the politicization of the Fed after months of Trump attacking Powell’s credibility.Sina Finance+ 2 The real story now is the confirmation battle. We already know at least one GOP senator has vowed to block any nominee,Wallstreetcn so this is far from a done deal. Bottom line: this injects massive uncertainty into the rate path. The initial trade is to follow the yield spike, but the bigger play is on volatility. This process is going to be messy.