The Long Road to the Fed: How Kevin Warsh Finally Secured Trump’s Most Powerful Economic Appointment

A Promise Made at Mar-a-Lago

The story of Kevin Warsh’s appointment as Federal Reserve Chairman is one of patience, political maneuvering, and well-timed alliances. It began in November 2024, shortly after Donald Trump’s election victory, when Warsh flew to the president-elect’s Mar-a-Lago estate expecting to interview for the position of Treasury Secretary. What he heard instead would set him on a fourteen-month journey that tested his resolve and political acumen. “You’re my Fed chair,” Trump told him directly, a promise that seemed certain at the time but would prove far more complicated to fulfill. For over a year, Warsh confidently shared this assurance with colleagues and friends, maintaining his conviction even as circumstances shifted dramatically around him. The path from that initial conversation to Trump’s official announcement in January 2026 would involve intense White House infighting, a criminal investigation that rocked the Federal Reserve, and a sophisticated campaign by Wall Street’s most influential figures. What appeared to be a straightforward appointment became a masterclass in Washington power dynamics, where connections, timing, and message discipline proved just as important as qualifications and ideology.

The Hassett Threat and Wall Street’s Intervention

By late 2025, Warsh’s path to the Fed chairmanship seemed blocked by an unlikely competitor: Kevin Hassett, Trump’s trusted economic adviser. Hassett had apparently won Trump over during the holiday season, with the president telling his cabinet he’d made his decision. The signs were unmistakable—other candidate interviews were abruptly canceled, and while Warsh vacationed in the Bahamas, Hassett was spending quality time with Trump in Florida. West Wing insiders began treating Warsh as yesterday’s news, with one senior official dismissively comparing him to someone desperately clinging to a sinking vessel. The conventional wisdom held that Trump had soured on Warsh for appearing too eager, a fatal flaw in the eyes of a president who valued the appearance of strength and independence. However, Warsh possessed something Hassett couldn’t match: a network of extraordinarily powerful Wall Street allies who understood both markets and politics. This coalition included Jamie Dimon, CEO of JPMorgan Chase, legendary investor Stanley Druckenmiller, Treasury Secretary Scott Bessent (who had his own close relationship with Druckenmiller), and Ronald Lauder, a Republican megadonor who happened to be Warsh’s father-in-law. These financial titans didn’t simply endorse Warsh—they actively campaigned against Hassett’s candidacy with a carefully crafted argument. Their message to Trump’s inner circle was pointed: Hassett’s closeness to the president would undermine the Fed’s perceived independence, potentially roiling financial markets that demanded at least the appearance of central bank autonomy. This was a risky strategy, given that Dimon had publicly clashed with Trump and Druckenmiller had refused to endorse either Trump or Kamala Harris in the 2024 election. Nevertheless, their collective credibility on economic matters carried weight, and questions began circulating about Hassett’s Wall Street credentials and his commitment to serving a full four-year term. When Hassett told reporters that his current position was his “dream job,” it only reinforced doubts about his hunger for the Fed chairmanship, gradually eroding his once-solid position as the presumptive nominee.

Trump’s Test: The Rate-Cutting Question

The turning point came on December 10, just hours after the Federal Reserve announced a quarter-point rate cut. Warsh met privately with Trump, who had long regretted his first-term appointment of Jerome Powell and was determined not to repeat that mistake. Trump wanted a Fed chair who would collaborate rather than resist, someone who shared his view that lower interest rates were essential for economic growth. He posed a direct question to Warsh: would he support additional rate cuts? Warsh’s answer was unequivocal—yes. Trump later told the Wall Street Journal, “I asked him what he thinks. He thinks you have to lower interest rates,” a response that aligned perfectly with the president’s economic philosophy. During the holiday period, Trump confided to aides that he appreciated Warsh’s intellectual sharpness and even his appearance, a marked change from 2017 when Trump had passed over Warsh for looking too young, choosing Powell instead based partly on the belief that Powell would favor easier monetary policy. The irony was rich—back then, Warsh had been considered the inflation hawk, while Powell was seen as more accommodating. Warsh later reflected on that earlier disappointment with professional pride, telling NYU professor Simon Bowmaker, “I did not put my ambitions ahead of my principles,” suggesting he hadn’t been willing to compromise his economic views just to secure the position. After Trump’s first term relationship with Powell deteriorated, the president’s team approached Warsh about potentially replacing Powell mid-term, but Warsh declined, telling Bowmaker, “The position was not open,” a principled stance that demonstrated respect for institutional norms. However, with Trump’s second term underway and Powell’s term naturally approaching its end, Warsh was willing to engage in serious discussions, even as Trump contemplated the more dramatic step of firing the incumbent Fed chair before his term expired.

The Powell Investigation Changes Everything

The political landscape shifted dramatically on January 11 when Jerome Powell made a stunning public announcement: the Department of Justice was investigating him for allegedly lying to Congress. This bombshell sent shockwaves through Washington’s political establishment and completely upended the Fed chair selection process. Republicans who might have been willing to confirm a Trump nominee while Powell was still in office suddenly developed cold feet, with Senators Thom Tillis and Lisa Murkowski publicly stating they would block any nomination until the investigation concluded. The scandal’s impact on Kevin Hassett’s candidacy was particularly devastating because he had spent months appearing on television programs sharply criticizing Powell’s monetary policy decisions. What had seemed like loyal support for Trump’s economic agenda now looked potentially compromising—if Hassett were nominated immediately after Powell’s downfall, it might appear that the entire investigation had been orchestrated to install Trump’s preferred candidate, undermining the Fed’s independence and credibility. On January 16, Trump delivered what amounted to a public humiliation to Hassett during a White House event. With Hassett sitting prominently in the front row, Trump announced, “I actually want to keep you where you are,” effectively ending his Fed chair ambitions in full view of the press corps and administration officials. In contrast, Warsh had maintained a strategic silence throughout the preceding months, delivering only a few carefully chosen speeches the previous year before disappearing entirely from television appearances. This discretion served him well, allowing him to avoid the appearance of campaigning for the position or attacking the incumbent, preserving his image as someone above the political fray who could command bipartisan respect and market confidence.

The Final Stretch and Failed Competitors

While the drama between Warsh and Hassett dominated insider attention, Trump did go through the motions of interviewing other candidates, though none ever had a realistic chance at the position. Fed Governor Christopher Waller’s interview lasted just thirty minutes—and Trump arrived two and a half hours late, a clear signal of disinterest. Rick Rieder received more time with the president and came prepared with a detailed monetary policy framework: a 3% federal funds rate, 4% yield on the 10-year Treasury, and 5% mortgage rates. However, his candidacy faced insurmountable obstacles, including past donations to Democratic candidates and Nikki Haley, Trump’s Republican primary opponent. Treasury Secretary Scott Bessent had begun the formal search process the previous summer, interviewing eleven candidates in total, determined not to repeat the experience of Steven Mnuchin, who had been blamed for recommending Powell in 2017. Bessent made it clear to friends that this decision would be Trump’s alone, protecting himself from future criticism if the relationship soured. As weeks passed without an announcement, some administration officials speculated that the search might expand further, speculation that intensified when Judy Shelton—known for supporting Trump’s unorthodox views on Federal Reserve policy—met with Bessent on the Monday before the final announcement. However, events were moving toward their inevitable conclusion. When the Fed held interest rates steady on Wednesday and Powell suggested in his press conference that additional rate cuts might not be forthcoming in the near term, Trump’s frustration with the incumbent chair was reinforced one final time.

The Appointment and What It Means

That Wednesday evening, Trump met with Kevin Warsh one last time, a final conversation that sealed the decision that had been fourteen months in the making. The following morning at 6:48 a.m., Trump made it official through his preferred communication channel—a social media post that ended months of speculation and maneuvering. “I have known Kevin for a long period of time,” Trump wrote, “and have no doubt that he will go down as one of the GREAT Fed Chairmen.” The appointment represented a validation of Warsh’s patient strategy, his careful cultivation of Wall Street relationships, and his willingness to align with Trump’s preference for lower interest rates without appearing to compromise his broader economic principles. For Trump, the selection fulfilled his long-standing desire to reshape the Federal Reserve with a chair he believed would be more sympathetic to his growth-oriented economic agenda while still possessing sufficient credibility with financial markets to avoid a crisis of confidence. The journey from that November 2024 conversation at Mar-a-Lago to the January 2026 announcement reveals how personnel decisions at the highest levels of government involve far more than simple qualifications or ideological alignment. Political loyalty, personal chemistry, outside advocacy, institutional respect, and simple timing all played crucial roles in determining who would lead the world’s most powerful central bank. Warsh’s success came from understanding that the promise Trump made in 2024 was genuine but not guaranteed, requiring constant behind-the-scenes work by allies, strategic silence at critical moments, and the good fortune of external events—like the Powell investigation—that eliminated competitors and created the political space for Trump to fulfill his original intention. As Warsh prepares to take the helm of the Federal Reserve, the financial world will be watching to see whether he can balance Trump’s preference for accommodative monetary policy with the institutional independence and inflation-fighting credibility that global markets demand from the Fed chair.