WASHINGTON (AP) — Kevin Warsh has sought the job of Federal Reserve chair, off and on, since President Donald Trump first considered him for the position nearly a decade ago. Now that he is in line for the position, the enormity of the challenge ahead of him is clear.
To be effective, Warsh must gain the trust of at least three constituencies: the committee of Federal Reserve officials whose votes he will have to win to change interest rates; the financial markets, which can undermine his efforts to reduce borrowing costs if they think he is acting politically; and not least Trump, a former real estate developer with an exquisite sense of just how much difference a cut or increase in interest rates can make for those with large debts, whether they are businesses, households or a government.
“He has to thread that needle," said Raghuram Rajan, an economist at the University of Chicago and former head of India's central bank. “If you are seen as too pliable to the administration, you lose the support of the members of the (Fed), you become ineffective in creating consensus.”
Yet if he alienates the White House, Rajan said, Warsh runs the risk of putting the Fed back in the White House's sights. Under Trump, the current chair Jerome Powell has come under relentless fire for not cutting interest rates as quickly as the president would like, and is now under criminal investigation by the Department of Justice. Powell has called the investigation a pretext to force him to lower rates.
Warsh may also face a bumpy confirmation process in the Senate, where two Republicans have already said they will oppose his nomination unless the criminal investigation is resolved. One of them, Thom Tillis from North Carolina, is on the banking committee, and could prevent that panel from approving the nomination if he and all Democrats vote against it. Tillis repeated Friday that he would oppose Warsh until the Justice Department investigation is resolved.
And Democratic Sen. Mark Warner from Virginia, who is also on the committee, said: "It is difficult to trust that any chair of the Federal Reserve selected by this president will be able to act with the independence required of the position, knowing that this administration will levy charges against any leader who makes interest rate decisions based on facts and the needs of our economy rather than Trump’s personal preferences.”
And there may be even more drama ahead: Powell, as part of the Fed's complex structure, could remain on the Fed's governing board, as well as its rate-setting committee, even after his term as chair ends in May. That would leave Warsh facing a situation no Fed chair has dealt with in 80 years: A former chair potentially acting as a counterweight to the new leader of the Fed.
Demonstrating some independence from the White House will likely be Warsh's biggest challenge. Alan Blinder, a former Fed vice chair, said that most important unknown is what promises Trump extracted from Warsh in return for nominating him to lead the U.S. central bank. The Princeton University economist said he worries about the private conversations between Trump and Warsh about what Fed policy needed to be.
“We all know Donald Trump — he wants a loyalty pledge of some kind,” Blinder said. “I hope Kevin Warsh didn’t give one.”
Blinder said that Warsh does have experience with markets and monetary policy, which are good preparation for the job. But, more importantly, Warsh is a people person who has the skills to influence other Fed officials when debating policy.
“The one thing he has in abundance is personal and diplomatic skills,” Blinder said. “He knows how to get along with people. He’s expert at that. He’s very likable.”
Don Kohn, a former Federal Reserve governor whose term overlapped with Warsh's, said Warsh “is very smart — both intellectually and in his ability to read the room.”
“He understands how important it is that the Fed’s decisions be based on a longer-term view” of the Fed's goals of stable prices and maximum employment, “rather than the short-term objectives of whomever happens to be in the White House," Kohn said.
FILE - Kevin Warsh, visiting fellow at the Hoover Institution, speaks at the Council on Foreign Relations in a panel discussion on "Central Banking in an Age of Improvisation," Nov. 28, 2011 in New York. (AP Photo/Mark Lennihan, File)
Senate leaders were scrambling to save a bipartisan spending deal and avert a partial government shutdown at midnight Friday. Democrats have demanded new restrictions on federal immigration raids across the country.
Democrats struck a rare deal with President Donald Trump Thursday to separate funding for the Homeland Security Department from a broad government spending bill and fund it for two weeks while Congress debates curbs on the U.S. Immigration and Customs Enforcement agency.
The deal came as irate Democrats had vowed to vote against the entire spending bill and trigger a shutdown in the wake of the deaths of two protesters at the hands of federal agents in Minneapolis.
Senate Majority Leader John Thune said late Thursday there were “snags on both sides” as he and Democratic leader Chuck Schumer tried to work through any objections that could delay passage past the Friday deadline.
The latest:
Trump is asking the justices to allow him to put in place an executive order declaring that children born to parents who are in the United States illegally or temporarily are not American citizens.
Lower courts have so far uniformly ruled against him.
The court on Friday issued its schedule of arguments for late March and early April. The justices are giving themselves roughly three months to reach a decision. The court generally winds up its work by the end of June.
The birthright citizenship order, which Trump signed Jan. 20, the first day of his second term, is part of his Republican administration’s broad immigration crackdown.
Several civil and immigration rights groups filed a lawsuit against the Trump administration Friday challenging a policy that allows federal immigration agents to enter private homes without a warrant.
The lawsuit by Lawyers for Civil Rights on behalf of the Greater Boston Latino Network and Brazilian Worker Center challenges a May 2025 memorandum from the acting director of the U.S. Immigration and Customs Enforcement that allows agents to enter private residents.
“The Fourth Amendment exists precisely to prevent government agents from breaking into people’s homes without any judicial process or oversight,” Brooke Simone, a staff attorney at Lawyers for Civil Rights, said in a statement.
The Trump administration imposed sanctions Friday against Iran ’s interior minister, accusing Eskandar Momeni of repressing nationwide protests that have challenged Tehran’s theocratic government. The penalties are the latest by the United States and the European Union targeting high-ranking officials over the crackdown.
The administration says Momeni has overseen Iran’s law enforcement forces that are responsible for the deaths of thousands of peaceful protesters.
Economic woes sparked the protests in late December before they broadened into a challenge to the Islamic Republic. The crackdown soon followed, which activists say has killed more than 6,000 people. Iranian officials and state media repeatedly refer to the demonstrators as “terrorists.”
The EU on Thursday imposed its own sanctions against Momeni, along with members of Iran’s judicial system and other high-ranking officers.
Russian President Vladimir Putin has agreed to Trump’s request to pause attacks on Ukraine’s power grid for a week.
Trump announced this on Thursday, but details about the timing and scope remain unclear. Kremlin spokesperson Dmitry Peskov confirmed the request but didn’t specify when it would start.
Ukrainian President Volodymyr Zelenskyy expressed skepticism, noting ongoing Russian attacks. Despite the pause, Russia continues drone and missile strikes. Bitter cold is expected in Ukraine, worsening conditions. Talks are ongoing, but no ceasefire agreement has been reached.
Financial markets are uneasy as investors try to figure out what Trump’s new nominee, Kevin Warsh, to lead the Federal Reserve will mean.
U.S. stocks fell modestly Friday. The S&P 500 dipped 0.1%. The Dow Jones Industrial Average fell 118 points, and the Nasdaq composite slipped 0.2%.
Prices for U.S. Treasury bonds initially rose following Trump’s announcement, perhaps suggesting increased hopes in the Fed’s ability to stay independent, before paring back.
Some of the wildest action was again in the precious metals markets, where gold’s price swung.
Leaders from Canada, the United Kingdom, Finland and other countries have recently visited China, while more are planning to go.
Since Trump took office again, America’s closest allies are exploring opportunities with China following clashes with Trump over tariffs and his demands to take over Greenland from NATO ally Denmark.
They’re resetting relations with a country long seen as a top adversary to many Western partners and the top economic rival to the U.S. despite the risk of irking Trump. This week alone, the prime ministers of the U.K. and Finland went to meet Chinese President Xi Jinping.
Protesters across the U.S. are calling for a nationwide strike to oppose the Trump administration’s immigration crackdown in Minneapolis.
The demonstrations are calling for “no work, no school, no shopping” on Friday.
The calls come almost a week after intensive care nurse Alex Pretti was killed while recording Border Patrol officers with his cellphone.
Multiple businesses announced they would be closed during the “blackout,” while some schools canceled classes in anticipation of mass absences. Some students are planning walkouts, while others plan to gather in churches, courthouses and city centers in solidarity.
Three other people were arrested with Lemon on Friday in connection with an anti-immigration protest that disrupted a service at a Minnesota church and increased tensions between residents and the Trump administration.
Lemon was arrested by federal agents in Los Angeles, where he had been covering the Grammy Awards, his attorney Abbe Lowell said.
It is unclear what charge or charges Lemon and the others are facing in the Jan. 18 protest at the Cities Church in St. Paul. Lemon’s arrest came after a magistrate judge last week rejected prosecutors’ initial bid to charge him.
Lemon, who was fired from CNN in 2023, has said he has no affiliation to the organization that went into the church and that he was there as a journalist chronicling protesters.
Warsh was previously a runner-up for the Senate-confirmed post of Fed Chair in 2017, when Trump selected Powell to lead the central bank.
Warsh is credentialed with degrees from Stanford University and Harvard University Law School. He is also married to Jane Lauder, the daughter of billionaire cosmetics heir Ronald Lauder, a major Republican donor.
At 35, Warsh became the youngest governor on the Fed’s seven member board, serving in that post from 2006 to 2011. Warsh worked closely with then-Chair Ben Bernanke in 2008-09 during the central bank’s efforts to combat the financial crisis and the Great Recession.
Warsh has been working as a visiting economics fellow at the Hoover Institution, a conservative think tank located at Stanford University. He is also a lecturer at the Stanford Graduate School of Business and a partner at the Duquesne Family Office, which manages the wealth of billionaire investor Stanley Druckenmiller.
The Department of Homeland Security says that the Federal Bureau of Investigation is now heading the investigation into the shooting death of Alex Pretti.
The Department said earlier this week that Homeland Security Investigations, which is a unit within the department, would be heading the investigation.
But Homeland Security Secretary Kristi Noem said during an interview with Fox News on Thursday that the FBI was in the lead. Tricia McLaughlin, a spokeswoman for the Department said Friday in an email that HSI will support them.
Separately, Customs and Border Protection is doing its own internal investigation.
Homeland Security did not immediately respond to questions about when the change was made or why.
“Don Lemon is an accomplished journalist whose urgent work is protected by the First Amendment,” said Rep. Hakeem Jeffries on social media.
“There is zero basis to arrest him. He should be freed immediately.”
He said “The Trump Justice Department is illegitimate. They will all be held accountable for their crimes against the Constitution.”
The retiring North Carolina senator has been among a group of Senate Republicans who have rushed to the defense of current Federal Reserve Chair Jerome Powell after it was revealed earlier this month that the Justice Department had opened an inquiry into him.
After Trump said Friday that he would nominate former Federal Reserve official Kevin Warsh to serve as the next chair of the Fed, Tillis made clear the inquiry would stand in the way of any confirmation.
“I will oppose the confirmation of any Federal Reserve nominee, including for the position of Chairman, until the DOJ’s inquiry into Chairman Powell is fully and transparently resolved,” Tillis wrote.
Tillis, a swing vote on the Senate Banking Committee, which oversees the Federal Reserve and approves central bank nominees, said in his post that Warsh is a “qualified nominee,” but stressed that “protecting the independence of the Federal Reserve from political interference or legal intimidation is non-negotiable.”
Tillis’s opposition could complicate the confirmation process for Warsh and Senate GOP leaders. Asked late Thursday whether Warsh could be confirmed without Tillis’s support, Senate Majority Leader John Thune said, “probably not.”
Journalist Don Lemon has been arrested after he entered a Minnesota church and recorded anti-immigration enforcement protesters who disrupted a service in an incident that increased tensions between residents and the Trump administration, his lawyer said Friday.
It was not immediately clear what charge or charges Lemon was facing in the Jan. 18 protest. The arrest came after a magistrate judge last week rejected prosecutors’ initial bid to charge the journalist.
Trump says he’ll nominate former Federal Reserve governor Kevin Warsh to be the next Fed chair.
Friday’s pick is likely to result in sharp changes to the powerful agency that could bring it closer to the White House and reduce its longtime independence from day-to-day politics.
Warsh would replace Jerome Powell when his term expires in May. Trump chose Powell to lead the Fed in 2017 but recently has assailed him for not cutting interest rates quickly enough. Warsh’s appointment requires Senate confirmation.
Warsh was on the Fed’s board from 2006 to 2011. He’s a fellow at the right-leaning Hoover Institution and a lecturer at the Stanford Graduate School of Business.
Trump has signed an executive order that would impose a tariff on any goods from countries that sell or provide oil to Cuba, a move that puts pressure on Mexico.
Mexican President Claudia Sheinbaum says her government had at least temporarily stopped oil shipments to Cuba.
She says it was a “sovereign decision” not made under pressure from the U.S. Trump has squeezed Mexico to distance itself from the Cuban government. In the wake of the U.S. military operation to oust former Venezuelan President Nicolás Maduro, Trump has said the Cuban government is ready to fall.
Trump is suing the IRS and Treasury Department for $10 billion, as he accuses the federal agencies of a failure to prevent a leak of the president’s tax information to news outlets between 2018 and 2020.
The suit, filed in a Florida federal court, includes the president’s sons Eric Trump and, Donald Trump Jr. and the Trump organization as plaintiffs.
Melania Trump is capping her first year back as first lady with the global release of a documentary she produced about the 20 days leading up to her husband’s return to the White House.
A private person, Melania Trump remains a bit of a mystery to the public in her husband’s second term. “Melania” premiered Thursday at the Kennedy Center before it is released on Friday in more than 1,500 theaters in the U.S. and around the world.
President Donald Trump arrives for the premiere of first lady Melania Trump's movie "Melania" at The John F. Kennedy Memorial Center For The Performing Arts, Thursday, Jan. 29, 2026, in Washington. (AP Photo/Allison Robbert)
