Donald Trump has revealed his pick to become the world’s most powerful central banker, declaring Kevin Warsh “may be the best” ever.
Mr Warsh, a former member of the Federal Reserve’s board of governors, will “never let you down” as chair of the country’s central bank, the president said in a Truth Social post.
It ends months of speculation on whether he would choose a puppet to force through US interest rate cuts.
Rumours around his potential appointment played out on financial markets overnight and contributed to a strengthening of the Trump-hit dollar and downwards shifts in many dollar-priced commodities such as gold and oil.
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Mr Warsh is widely seen as a cautious advocate of interest rate cuts.
They are being demanded by the president to boost economic growth.
He has also spoken of the need to shrink the Fed’s balance sheet – a policy that is generally supportive of higher interest rates, helping to balance his possible approach.
He has, however, spoken of the need to loosen post-financial crisis regulations on banks.
The market reaction suggests that Mr Trump’s pick is not seen as the champion for interest rate cuts that investors had feared, potentially eroding some concerns about the independence of the Federal Reserve.
“I have known Kevin for a long period of time, and have no doubt that he will go down as one of the GREAT Fed Chairmen, maybe the best”, Mr Trump wrote.
“On top of everything else, he is ‘central casting, and he will never let you down.”
The appointment is important globally because the fate of the world’s largest economy has ramifications for everything in the financial system.
The central bank is a crucial balancing tool – especially in an era of high uncertainty, and most of that emanates from the United States itself.
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