Washington — In a recent appearance on “Face the Nation,” IBM Vice Chairman Gary Cohn expressed strong support for President Trump’s nominee for chairman of the Federal Reserve Board, Kevin Warsh, describing him as “very highly qualified.” Cohn emphasized that Warsh’s leadership would restore the Fed to its traditional norms.
President Trump, announcing Warsh’s nomination on Truth Social, projected confidence in his selection, stating that Warsh could potentially be “one of the GREAT Fed Chairmen, maybe the best.” Warsh, 55, brings substantial experience to the role, having served on the Fed’s board of governors from 2006 to 2011, and stands out as the youngest member in its history. His subsequent roles included collaborating with billionaire investor Stanley Druckenmiller and holding academic positions at the Hoover Institution.
Cohn, who previously directed the National Economic Council during Trump’s first term, praised Warsh’s unique background and his critical contributions during the tumultuous 2008 financial crisis. “Kevin was the point person at the Fed — he was involved in every one of those discussions,” Cohn remarked, asserting that Warsh’s expertise significantly aided the U.S. in navigating the crisis.
Wall Street analysts are likely to view Warsh as a prudent choice given his proven track record in monetary policy and established perspectives on inflation. Cohn anticipates that Warsh will focus on setting interest rate policy while steering clear of non-financial issues. With the financial landscape currently pressuring interest rates to decrease, Cohn predicts Warsh may endorse one or two interest rate cuts within the year.
Cohn also noted Warsh’s position on the Fed’s balance sheet, indicating that he believes Warsh will advocate for a reduction in its size, moving away from the extensive securities purchases enacted previously. “The Fed went in and bought an enormous amount of securities. I think Kevin will reverse that,” Cohn stated, adding that he expects focused regulatory practices under Warsh’s leadership. Cohn clarified that while regulation is necessary, it must also facilitate market growth and consumer access to capital.
The nomination comes in the wake of President Trump’s ongoing criticism of current Fed Chairman Jerome Powell, with the President having previously called for lower interest rates and hinted at Powell’s potential dismissal. Powell, leading the Fed since February 2018, is set to serve until May 2026. Cohn reassured viewers that Trump is fully aware of the Fed’s need for independence, highlighting Warsh as an advocate for this principle.
However, Warsh’s confirmation process may face challenges. Senator Thom Tillis, a North Carolina Republican, has stated his intention to oppose all Fed nominees until ongoing legal investigations, including subpoenas related to Powell, are resolved. These developments have raised concerns about the Fed’s autonomy amid external pressures regarding its decision-making.
