Trump signals Kevin Warsh as top Fed Chair pick as Bessent calls for pro-growth shift in U.S. monetary policy.
President Donald Trump is signaling Kevin Warsh as his top choice for the next Federal Reserve Chair.
At the same time, Treasury Secretary Scott Bessent is supporting a shift to a more flexible, pro-growth monetary policy. These developments are prompting new discussions about the future direction of U.S. interest rate policy and economic strategy.
Warsh Emerges as Leading Candidate for Federal Reserve Chair
Kevin Warsh, a former member of the Federal Reserve Board during the financial crisis, is gaining attention in prediction markets. His name has come up more frequently following President Trump’s recent remarks about the central bank’s leadership.
Trump has expressed concerns in the past about high interest rates and has criticized the Federal Reserve for slowing down growth.
These views align with Warsh’s more cautious approach to raising interest rates, although Warsh has not yet made any public statements on future rate cuts.
Notably, Kevin Warsh has emerged as the front runner for Fed Chair, as he is generally considered the most hawkish among the top four candidates, including Jerome Powell.
Amazing that Kevin Warsh is now the front runner to become the new Fed Chair, since among the four top candidates , plus Powell, he’s widely viewed as the most hawkish. From Grok: https://t.co/degwBDYMUv pic.twitter.com/Om0gErO5mN
— Gary Black (@garyblack00) January 16, 2026
The President’s decision to keep Economic Adviser Kevin Hassett in his current role further positions Warsh as the leading candidate.
Hassett was previously considered for the role, but Trump’s recent announcement has shifted expectations away from him.
Bessent Pushes for Flexible and Growth-Oriented Policy
Treasury Secretary Scott Bessent recently shared his views on the Federal Reserve’s current stance. In an interview with Fox Business, he described the central bank’s monetary policy as “overly restrictive” given the strength of the U.S. economy.
Bessent explained that economic expansion, especially driven by productivity and innovation, does not always lead to inflation. He stated,
“Just because an economy is expanding does not mean there will be overheating or inflation.”
He also pointed to the 1990s under Alan Greenspan’s leadership as an example of how the Fed can support long-term growth. Greenspan waited for full data before reacting, which allowed the economy to grow without immediate rate hikes.
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Markets Watch for Policy Shifts Under New Fed Leadership
Market participants are closely monitoring how a potential leadership change might influence future monetary policy. Bessent has argued that the Fed needs to explain its decisions clearly to build trust among investors.
He also noted that a flexible approach is required in the current economic environment, especially as productivity and capital efficiency improve. According to Bessent, the Fed should avoid automatic tightening and instead respond to broader economic trends.
These developments are creating renewed focus on how the Federal Reserve might adjust its strategy in 2026. With Warsh’s increasing visibility and Bessent’s support for a growth-based approach, expectations are shifting across financial markets.