Trump appoints new Federal Reserve chairman; several popular candidates who were not selected say: interest rates are too high and should be lowered.
Trump nominates Warsh as Fed Chair, defeated candidates express support and criticize current monetary policy.
Mentioned by WallstreetCN, before the US stock market opened on Friday, January 30th, US President Trump announced his nomination of Kevin Warsh as Chairman of the Federal Reserve, succeeding Powell, whose term ends in May 2026.
This appointment means several officials previously seen by the market as strong contenders were not selected, but they quickly voiced support for Warsh and commented on current monetary policy.
White House National Economic Council Director Hassett said he was not disappointed at being passed over, stating he already has the position he wants and will fully support the Senate confirmation of Warsh’s nomination. He also criticized the Fed’s decision to keep rates unchanged in January as a mistake.
Federal Reserve Governor Milan also stated he would welcome Warsh, praising his innovation and correctness. He said he would continue his role as Governor until Congress confirms his replacement, while stressing that current interest rates remain too restrictive.
Hassett Criticizes Current Monetary Policy Stance
As one of the former top contenders, Hassett promptly expressed support for Warsh after being passed over, saying he deeply respects the choice and will work hard to push for confirmation in the Senate.
Hassett, now a White House advisor, said he was not disappointed at “not being nominated by President Trump as Fed Chair; I already have the position I want.”
Hassett explicitly criticized the Fed's latest decision, saying it was a mistake not to cut rates in January. He stated that the goal of the Trump administration’s actions is to make the Fed’s job easier, and believes supply-side boom will give the Fed room to cut rates.
Regarding dollar policy, Hassett reiterated on a media program that a strong dollar has been the policy of successive US Treasury Secretaries for decades, and called Secretary Besant a spokesman for dollar policy.
When asked about dollar weakness, he said movements will fluctuate and added the dollar will strengthen when fiscal policy is supportive.
Milan Praises Warsh and Emphasizes Rate Cut Necessity
Fed Governor Milan stated he assumes Warsh will succeed him, and expects Fed officials to welcome him. He praised Warsh as consistently innovative, persuasive, and correct on key issues.
With his “interim” term ending soon, Milan admitted he is uncertain about future plans and is waiting for results, but will remain Governor until Congress confirms a successor.
He also thanked Powell for his contributions, saying Powell deserves thanks from all Americans and helped the US avoid a second Great Depression.
On monetary policy, Milan explicitly stated he still believes FOMC rates are too restrictive, that employment has not stabilized enough to eliminate concerns, and that there is currently no inflation problem; unemployment is about 0.5 percentage points above optimal.
He also mentioned that reducing the Fed’s balance sheet requires regulatory reform; deregulation would allow the Fed to shrink its balance sheet.
Waller’s Dissent Highlights Pressure for Rate Cuts
Fed Governor Waller, who cast a dissenting vote at this week’s policy meeting, issued a statement on Friday detailing his opposition to keeping rates unchanged. He believes monetary policy is still restricting economic activity and that data clearly show more easing is needed.
Waller’s dissent reflects his concerns about labor market vulnerability. He pointed out that since mid last year the unemployment rate has risen and job growth slowed; upcoming data revisions may show that wages and job growth last year were in fact stagnant.
Waller revealed that outreach meetings have indicated layoff plans for 2026, pointing to considerable uncertainty in future employment growth and that severe labor market deterioration is a major risk.
He also noted that, excluding the impact of Trump’s tariffs, inflation is actually very close to the Fed’s 2% target.
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