Trump Picks Warsh for Fed as AI Productivity Debate Shapes Rate Path
President Donald Trump has nominated former Federal Reserve Governor Kevin Warsh to succeed Jerome Powell as Chair of the central bank, setting the stage for a pivotal shift in U.S. monetary policy. The nomination comes amid Trump's persistent public pressure for significantly lower interest rates, which he has argued are necessary to boost economic growth and maintain U.S. competitiveness. Outgoing Chair Jerome Powell, whose term ends in May 2026, oversaw a period of rate cuts in the fall, pausing recently to hold the benchmark rate in a range of 3.5% to 3.75%, but Trump has sharply criticized the pace of easing, stating rates 'should be two points lower.' Warsh's potential approach, dubbed the 'Warsh Shock' by some observers, centers on a bold thesis: that the artificial intelligence boom is ushering in a historic wave of productivity gains. He has suggested these AI-driven efficiencies could justify a lower interest rate environment without sparking inflation, a view that aligns with the White House's goal of reducing borrowing costs for consumers, businesses, and the government. However, this perspective is not universally accepted. A Financial Times-Booth survey of economists revealed widespread skepticism, indicating a potential clash between the nominee's theoretical framework and conventional economic models. While Trump has expressed confidence that Warsh supports cutting rates, reporting from Politico suggests the nominee may have 'bigger plans' that could extend beyond the president's immediate demands. This includes a focus on how long-term economic transformations, like the adoption of AI, influence monetary policy. Furthermore, as noted by Fortune, Powell's final actions could still set the stage for further cuts, potentially creating a smoother transition for the incoming chair. The confirmation and subsequent policy decisions of Warsh will determine whether the Fed embraces a new doctrine shaped by technological optimism or adheres to a more traditional cautious path.
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Trump’s Fed chair pick argues there is one crucial reason to lower interest rates | CNN Business
Kevin Warsh, a former governor of the Federal Reserve, in Washington, DC, on April 25, 2025. Tierney L. Cross/Bloomberg/Getty Images ... Link Copied! ... Back in December, Kevin Warsh hinted how he may argue for lower interest rates. AI is ushering in “the most productivity-enhancing wave of our lifetimes — past, present and future,” Warsh, who was nominated by President Donald Trump ...
President Donald Trump and Wall Street Want Lower Interest Rates -- but Fed Chair Nominee Kevin Warsh May Have Other Plans | The Motley Fool
Lowering the federal funds rate, which in turn reduces borrowing costs for consumers and businesses, is viewed as a key catalyst to boosting U.S. economic growth. If lending is less costly for businesses, they're more inclined to borrow with the intent to increase hiring, acquisition activity, and capital spent on innovation. Jerome Powell's term as Fed chair ends on May 15, 2026. Image source: Official White House Photo by Daniel Torok. President Donald Trump ...
President Donald Trump wants 'lowest interest rates in the world' | Fox Business
In a wide-ranging exchange with ... Federal Reserve Chair Jerome Powell, arguing rates should be lower. ... "He’s so bad that, I mean, interest rates should have been cut. We should be two points lower," Trump said. Kudlow closed the interview by thanking the president for his time. ... Get a brief on the top business stories of the week, plus CEO interviews, market updates, tech and money news that matters ...
The president told NBC News in an exclusive interview that he wouldn't have tapped Kevin Warsh to be the next Fed chair if he didn't support cutting interest rates. ... Feb. 4, 2026, 2:32 PM EST / Updated Feb. 4, 2026, 6:55 PM EST ... President Donald Trump said Wednesday that his pick to lead ...
Federal Reserve holds interest rates as Trump piles on pressure | Federal Reserve | The Guardian
A majority of members in the Fed’s federal open market committee (FOMC) voted to pause interest rate cuts after slashing rates three times in the fall. Rates currently sit at a range of 3.5% to 3.75%. The Trump administration has put unprecedented pressure on the Fed chair, Jerome Powell, ...
Powell’s parting gift from the Fed may be more rate cuts than expected, courtesy of graying data | Fortune
While the bridge between President Trump and Fed Chair Jerome Powell has been well and truly burned, the outgoing central bank chief may yet set the stage for further interest rate cuts that the White House has so doggedly pursued over the past 12 months. Powell’s stance throughout much of ...
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