Trump's Fed chair pick Warsh likely to boost Wall St rule easing

• Warsh has publicly stated the Fed should not write bank rules independently from political oversight, contrasting with traditional Fed independence on regulatory policy
• He is expected to support Vice Chair Bowman's sweeping effort to reduce Wall Street capital requirements and ease supervision rules, the most significant deregulatory push since the 2008 financial crisis
• Wall Street banks welcomed the nomination, citing Warsh's prior Fed experience during the 2008 crisis and his view that 'regulation has been very bad' in recent years, providing 'sand in the gears of the economy'

Summary: Trump's Fed Chair Pick Warsh Expected to Accelerate Bank Deregulation

President Donald Trump has nominated Kevin Warsh, a former Fed governor (2006-2011) and current Stanford University fellow, to chair the Federal Reserve, succeeding Jerome Powell whose term expires in May. Regulatory experts anticipate Warsh will significantly advance Wall Street deregulation efforts and align Fed policy more closely with administration goals.

Key Background:

Warsh, a Republican and former investment banker, helped shape the Fed's response to the 2008 financial crisis. He has consistently argued that the Fed should not independently write bank rules, stating "regulation is too important to be left to regulators alone."

Regulatory Philosophy:

• In a 2024 Wall Street Journal op-ed, Warsh blamed "regulatory failures" at the Fed for the 2023 banking turmoil
• He supports Vice Chair Bowman's sweeping efforts to ease Wall Street capital rules—the most aggressive deregulatory push since 2008
• Warsh has stated bank regulation has been "very bad for the last four or five years," creating "sand in the gears of the economy"
• Unlike Powell, who served as a "moderating influence," Warsh is expected to pursue more aggressive deregulation

Market Implications:

Wall Street banks welcomed the nomination, viewing Warsh's crisis experience and banking background positively. Experts predict Warsh will coordinate closely with Treasury Secretary Bessent, who argues easing bank rules promotes economic growth. Additionally, Warsh favors shrinking the Fed's balance sheet, reducing its market footprint and expanding private banks' role.

Warsh supports Fed independence on monetary policy but opposes it for regulatory and supervisory matters, aligning with Trump's desire for greater political oversight of financial regulation.