During the 2017 selection process for the next leader of the U.S. Federal Reserve, the candidacy of former governor Kevin Warsh prompted significant discussion among policymakers and economists regarding his public stance on monetary policy. The examination of his record occurred as the Trump administration sought a successor to then-Chair Janet Yellen, whose term was set to conclude.
Warsh, who served on the Federal Reserve Board of Governors from 2006 to 2011, was one of several individuals President Donald Trump publicly stated he was considering for the position. His tenure at the central bank coincided with the 2008 financial crisis, giving him direct experience in managing economic policy during a period of instability.
Central to the discussion surrounding his potential nomination were his past criticisms of the Federal Reserve’s post-crisis policies, particularly the extensive bond-buying programs known as quantitative easing. In public statements and opinion articles following his departure from the Fed, Warsh had advocated for a more rules-based approach to monetary policy and expressed concerns about the central bank’s expansive balance sheet. These positions were often interpreted by analysts as more “hawkish”—favoring higher interest rates to preempt inflation—than the “dovish” stance of the Yellen-led Fed, which had maintained low rates to encourage economic growth.
The debate over Warsh’s potential leadership highlighted the function of the Federal Open Market Committee’s (FOMC) Summary of Economic Projections, often referred to as the “dot plot.” Released quarterly, this document anonymously charts each committee member’s projection for the future path of the federal funds rate. If appointed, a new chair’s first participation in the dot plot would serve as a key public signal of their policy inclination and how it aligns with that of other committee members.
During the selection period, President Trump had publicly expressed a preference for lower interest rates, stating they would help stimulate economic activity and manufacturing. This created a focal point for observers, who noted a potential divergence between the president’s stated preference and some of Warsh’s previously articulated views.
Ultimately, President Trump nominated Jerome Powell, who was then serving as a Fed governor, to the position of Federal Reserve Chair. The Senate confirmed Powell, and he assumed office in February 2018. The consideration of Warsh remains a documented part of that selection process, reflecting the public scrutiny applied to potential leaders of the nation’s central bank.
