On 30 January 2026, Donald Trump tapped Kevin Warsh — a former Fed governor between 2006 and 2011, and prominent policy hawk in a few past episodes — to take over from Jerome Powell as the US Federal Reserve Chair when Powell’s term ends in May. 

With markets digesting the implications of Warsh’s nomination and his recent statements, we turned to Alessia Berardi, Head of Global Macroeconomics, for her take on how investors are reading the news, the main themes emerging from Warsh’s communications, and what might lie ahead for Fed policy as the economic outlook continues to shift.

Alessia, how would you characterise Kevin Warsh’s policy stance based on his past speeches and the current economic environment?

Having followed Kevin Warsh’s communications over time, it’s clear he has historically prioritised inflation control over growth targets, frequently criticising quantitative (QE) and suggesting that the Fed has, at times, exceeded its monetary remit. His recent statements acknowledge that the current strength of the US economy is rooted in an innovation-led cycle, with growth fuelled by productivity gains from unprecedented technological advances. In addition, this is supporting stronger growth with limited inflationary pressure, therefore justifying the ongoing normalisation of rates. 

Given this background, a Warsh-led Fed is likely to continue the ongoing cycle in line with what economic fundamentals justify. Another key factor to look at is also whether Powell remains on the Federal Open Market Committee (FOMC), as each vote carries equal weight and could influence the committee’s direction.

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