By Nick Timiraos and Brian Schwartz
WASHINGTON -- When Kevin Warsh showed up at Mar-a-Lago to interview with Donald Trump shortly after the president-elect's campaign victory in November 2024, Trump expressed surprise that Warsh was interested in being considered for Treasury secretary.
"You're my Fed chair," Trump told him, Warsh later recounted to an associate. For months, Warsh had been making similar comments to new acquaintances and longtime confidants alike: The job would eventually be his.
It would take 14 months, a reality-television-style public audition, a bitter behind-the-scenes campaign, and a criminal investigation of the sitting Fed chair before that prediction came true. On Friday morning, Trump announced he would nominate Warsh to succeed Jerome Powell as chair of the Federal Reserve, capping one of the most public personnel contests of Trump's second term.
"President Trump's exhaustive and thorough selection process for the next Fed Chairman was accordingly guided by the sole consideration of who can best step in and restore confidence in Federal Reserve decision-making," White House spokesman Kush Desai said in a statement.
Before getting the nod, Warsh would first have to overcome the other Kevin, Kevin Hassett, the director of the National Economic Council. By late November 2025, Hassett, one of Trump's most trusted economic advisers, also thought he had the job wrapped up.
The president told a cabinet meeting he had narrowed his list to one. Interviews with other contenders were suddenly canceled. While Warsh vacationed in the Bahamas over the year-end holidays, Trump held court with Hassett at Mar-a-Lago. Everything pointed to Hassett.
"I know who I am going to pick," Trump told reporters. Asked if Hassett was the selection, Trump grinned but said little.
Inside the White House, some officials had written off Warsh entirely. One senior administration official told The Wall Street Journal in early December that Warsh was finished, comparing him to a Venezuelan drug smuggler trying to cling to a boat after U.S. forces had fired on him.
The problem, this official explained, was that Trump thought Warsh wanted the job too much. Another administration official compared him to a used-car salesman.
But Warsh had something Hassett didn't: an extensive network of CEOs, finance bigwigs and creatures of the GOP establishment that he had cultivated over decades. He relied on that network to stay solidly in the conversation. It didn't hurt that his father-in-law, Estée Lauder heir Ronald Lauder, is a major Republican donor and longtime Trump acquaintance.
At a private conference in New York in December, JPMorgan Chase CEO Jamie Dimon said Warsh would make a great chair, according to people familiar with his remarks. Legendary investor Stanley Druckenmiller, Warsh's business partner and a mentor of Treasury Secretary Scott Bessent, made clear to his allies on Wall Street that he wanted Warsh to be next in the job.
Wall Street insiders began calling administration officials to make the case for Warsh, with the explicit goal of edging Hassett out of contention, according to people familiar with the outreach. The campaign focused on the argument that Hassett was too close to Trump to have credibility with bond markets as an independent Fed chair.
It was a quiet campaign that could easily have backfired. Druckenmiller, a fixture of the Republican Old Guard, announced before the 2024 election that he wouldn't vote for either Trump or his challenger, Kamala Harris. Dimon has had a rocky relationship with the president.
The gambit unnerved some Trump allies who favored both Warsh and Hassett.
Still, some administration officials helped erode Hassett's candidacy by voicing concern about his credentials on Wall Street. Adding to the doubts: Hassett had indicated he was open to serving for less than a full four-year term, which some people inside and outside the administration seized on to question how badly he wanted the job.
For his part, Hassett had stated publicly that his current position was his "dream job" and that he was happy to serve Trump however the president wanted.
Warsh secured a meeting with Trump on Dec. 10, hours after the Fed approved a quarter-point rate cut, and he told the president exactly what he wanted to hear.
The president had long regretted choosing Powell as Fed chair in his first term, and people close to him said he was fixated on finding a successor who would take a less rigid approach to dealing with the White House.
Trump asked Warsh whether he could trust him to support interest-rate cuts if he were chosen to lead the central bank, according to people familiar with the matter. Warsh indicated to the president that he would support lowering rates.
"I asked him what he thinks. He thinks you have to lower interest rates, " Trump said in a December interview with the Journal when asked whether he pressed Warsh to commit to lowering rates. The interview marked a turning point, with Trump suggesting Warsh was the new favorite.
Acumen and good looks
Trump told associates over the holidays that he had been struck by Warsh's acumen and good looks. It was a change from 2017, when Trump told aides that Warsh looked too young and instead picked the silver-haired Powell, who is 17 years older.
Powell's main advantage over Warsh was that he'd been more open to supporting the easy-money policies of the Fed, while Warsh had staked out a position as a hawk. Warsh left his 2017 interview with Trump "not overly enthused about my prospects," he said in a 2023 interview with Simon Bowmaker, a professor at New York University, for a forthcoming book about the Fed. "I did not put my ambitions ahead of my principles."
Trump quickly soured on Powell for raising rates early in his first term. Senior officials queried Warsh about his interest in replacing Powell if Trump tried to force him out. Warsh demurred. "My response was that the position was not open and would not be open until the chairman's term was complete," he told Bowmaker.
The overtures resumed in Trump's second term. In meetings at Mar-a-Lago last year, Trump spoke with Warsh about potentially firing Powell and selecting Warsh as his replacement, the Journal reported. Warsh again advised against it.
The race took one final turn this month. On Jan. 11, Powell disclosed the Justice Department's criminal investigation of his congressional testimony in a startling video, setting off a firestorm.
The probe prompted bipartisan backlash. Social-media posts attacking the Fed chair were one thing; the use of the legal system to target the central bank was a bridge too far -- even for many Republicans. Sen. Thom Tillis, a Republican who sits on the Banking Committee that handles Fed nominations, vowed to block any nominee until the investigation was resolved. Sen. Lisa Murkowski joined him.
Hassett bore the brunt of that fallout. He had spent months on television attacking Powell and trumpeting the administration's pressure campaign against the Fed. Pressed about the investigation by reporters, Hassett delicately defended it. With lawmakers now concerned that the next Fed chair would face extreme pressure to lower rates, Hassett's closeness to Trump -- once his greatest asset -- had become a liability.
On Jan. 16, Trump delivered a mortal blow to Hassett's candidacy. Speaking at a White House event with Hassett seated in the front row, the president praised his economic adviser's recent television appearance.
"I actually want to keep you where you are if you want to know the truth, " Trump told his NEC director.
Warsh, meanwhile, had taken a different approach. He gave a handful of speeches laying out his vision for the Fed last spring, and then appeared on television through the summer and early fall before stepping back from public view.
The other finalists gave the process a veneer of careful deliberation, but it isn't clear that they ever had a chance against the "two Kevins."
Fed governor Christopher Waller's candidacy depended on wowing Trump during an in-person interview, something he had done to great effect in 2019 when he secured his nomination to the Fed's board.
But this time, the meeting didn't go as well, according to people familiar with the matter. It lasted just 30 minutes -- shorter than Warsh's or BlackRock executive Rick Rieder's -- and Trump was 2 1/2 hours late, having come from a dignified transfer ceremony of American soldiers killed in Syria. The president hosted Waller at the White House residence after having changed out of his tie and suit jacket.
Rieder came out of his interview with the president unsure where he stood, people familiar with the matter said. The conversation lasted over an hour, during which Rieder pitched Trump on a "3-4-5" plan for interest rates: targeting a 3% fed-funds rate, a 4% rate for the 10-year Treasury, and a mid-5% rate on 30-year mortgages.
Rieder's past political donations to Democrats and Republican rivals such as Nikki Haley were a black mark among some White House officials.
Early days
Bessent began curating a formal search process last summer after the president started telling others of his desire to announce a Fed chair as soon as possible. Bessent invited 11 candidates to interview with him before narrowing down a shortlist for consideration by Trump.
The process appears to have accomplished several objectives for Bessent. It created a mechanism to slow things down. A premature selection could have put the chair-designate in an unenviable position, forced to either amplify the administration's frustration with the Fed and risk his credibility, or defend the Fed's decisions and risk losing Trump's confidence.
The extended audition also amplified credible voices outside the Fed who took to the airwaves and op-ed pages with arguments for cutting interest rates. And it provided a way to screen out candidates with qualifications suspect on Wall Street from formal consideration.
But for all its strategic utility, the process also served a more personal purpose for Bessent: insulation.
He had watched what happened to his predecessor. In 2017, Treasury Secretary Steven Mnuchin recommended Powell over Warsh for Fed chair. Trump took his advice -- and spent years attacking Mnuchin for it after he soured on Powell. The president still blames Mnuchin for the recommendation.
Bessent wasn't going to own this one. He was adamant about not putting his thumb on the scale for any candidate. He told friends that Trump was making the decision for the Fed and no one else.
The delay in making the announcement prompted some administration officials to wonder if Trump might expand the search. Judy Shelton, a vocal cheerleader for Trump's Fed views whom the Senate declined to confirm for a Fed post during his first term, met with Bessent at the Treasury Department on Monday, fueling speculation the race might be adding new candidates rather than narrowing down.
But the process neared its end after the Fed met Wednesday and held rates steady, interrupting three straight cuts. Powell suggested there might be little need for the Fed to cut anytime soon.
Ahead of a final interview with Warsh on Thursday, Trump said at a cabinet meeting he would reveal his pick next week. But the meeting went so well, Trump told reporters later that evening he would announce his decision Friday.
On Friday morning at 6:48 a.m., Trump made it official.
"I have known Kevin for a long period of time, and have no doubt that he will go down as one of the GREAT Fed Chairmen, maybe the best," Trump wrote on his social-media account. "On top of everything else, he is 'central casting,' and he will never let you down."
Write to Nick Timiraos at Nick.Timiraos@wsj.com and Brian Schwartz at brian.schwartz@wsj.com
(END) Dow Jones Newswires
January 30, 2026 21:00 ET (02:00 GMT)
Copyright (c) 2026 Dow Jones & Company, Inc.
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