Fed chair candidate directly criticizes Powell… “Fed leadership needs replacement”

Kevin Warsh, former Fed board member and a potential candidate for the next Fed chair, stated that “the leadership of the Fed needs to be replaced.”

In an interview with US CNBC on the 17th (local time), Warsh said, “Independence is essential in carrying out monetary policy,” but added, “However, that does not mean independence must be guaranteed for everything the Fed does.” Warsh continued, “The Fed led by Chair Powell has strayed into policy areas beyond its authority,” and emphasized, “There is a need to change the Fed’s leadership.”

When asked whether President Donald Trump should dismiss Chair Powell, Warsh answered, “I think the change in the Fed’s leadership will happen at the appropriate time.” He added, “The Fed’s reluctance to cut rates is a factor being evaluated negatively for the institution,” and “the past failure to properly forecast inflation is putting pressure on them.” Warsh also said, “The reason President Trump feels justified in publicly pressuring the Fed is that leadership change is necessary for the institution’s policy management.”

Warsh is being discussed as a candidate for the next Fed chair. He served as a Fed board member from 2006 to 2011. Bloomberg reported, “While Warsh consistently pursued hawkish rate policies during his time as a Fed board member, this year he is advocating for rate cuts.” The report continued, “President Donald Trump is considering nominating a successor when Chair Powell’s term expires in May next year.”