White House economic adviser Kevin Hassett said on Thursday that he is confident Kevin Warsh will assume the role of Federal Reserve chairman in May, signalling a potential leadership transition at the US central bank.
Speaking to Fox Business Network, Hassett stated, “I’m highly confident that that will happen,” referring to Warsh’s expected appointment.
He added that preparations for the confirmation process are progressing, noting that a hearing for Warsh is likely to begin as early as next week.
Hassett’s remarks suggest growing certainty within the administration regarding the timing and direction of the Federal Reserve’s leadership change, with Warsh positioned as the preferred successor.
Powell expected to step aside after confirmation
Hassett also addressed the future of current Federal Reserve Chairman Jerome Powell, indicating that Powell has signalled his willingness to step down once a new chair is confirmed.
“He’s really signaled that once there’s a confirmed head chair, that he’ll step aside, and that’s the appropriate thing for him to do,” Hassett said during an appearance on the Mornings with Maria programme.
However, Powell’s own recent statements suggest a more subtle position regarding his future at the central bank.
In March, Powell indicated that he would not leave the Federal Reserve until a criminal investigation led by US Attorney Jeanine Pirro is concluded.
He also noted that he has yet to decide whether he will remain on the Federal Reserve’s Board of Governors, where his term extends until 2028.
This introduces a degree of uncertainty around the leadership transition, particularly if the investigation prolongs Powell’s tenure in any capacity.
Trump-Powell tensions deepen over interest rate policy
The current standoff also reflects a long-standing and often strained relationship between Donald Trump and Powell, which dates back to Powell’s appointment in February 2018 following Janet Yellen.
Despite being Trump’s own nominee and a registered Republican, Powell soon became a point of contention after the Federal Reserve continued raising interest rates.
During his first year as chair, Powell oversaw four rate hikes as part of a policy normalisation cycle that had begun under Yellen in 2015, taking the federal funds rate to a range of 2.25% to 2.50% by the end of 2018, its highest level in a decade.
By mid-2019, however, Trump openly criticised the Fed’s stance.
Aarguing that higher rates strengthened the US dollar and undermined American exporters amid escalating trade tensions with China.
“We don’t have that advantage because we have a Fed that doesn’t lower interest rates,” Trump said on CNBC in June 2019.
Although the Fed later reversed course and cut rates three times in 2019 as economic growth softened.
Trump continued to criticise Powell, at times referring to Fed officials as “boneheads” and publicly mocking the chair.
The tensions have intensified during Trump’s second term, with the president repeatedly urging the central bank to implement deeper rate cuts even after it delivered three consecutive quarter-point reductions starting in September.
Recently, Trump has escalated his stance from public criticism to directly pressuring Powell to either lower interest rates further or step down, ahead of the end of Powell’s term in May 2026.
Legal developments may delay leadership transition
Adding to the complexity, a US judge last week upheld a block on warrants issued as part of the investigation into Powell.
The ruling sets the stage for a likely appeal, which could further delay efforts by President Donald Trump to install a new Federal Reserve chief.
The legal proceedings may therefore play a significant role in shaping the timeline of leadership changes at the central bank, even as the administration signals confidence in Warsh’s imminent appointment.
As the situation evolves, the interplay between political decisions and ongoing legal challenges is expected to remain a key factor influencing the Federal Reserve’s leadership outlook.
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