Former Federal Reserve Governor Kevin Warsh has, according to multiple reports, talked with President Donald Trump. They even speculated on the fate of Jerome Powell, the reigning Chairman of the Federal Reserve. Their meetings took place at Mar-a-Lago in Florida, where Warsh advised Trump against firing Powell or interfering with his ongoing tenure.
Warsh’s advice, perhaps not surprisingly, focused heavily on the need to allow Powell to complete his four-year term. That term is set to end in May of 2026. Indeed, for months now Trump has publicly pressured Powell to cut interest rates. This position has received a remarkable amount of media attention.
According to people familiar with the deliberations Warsh was particularly adamant about preserving stability in the Fed. He delivered this strong message in person to Trump himself. He entreatied the President to defend Powell’s position, and by doing so, allow him to do his job without interference or pressure. Powell telegraphed that, as things stand under existing law, Trump can’t fire him from his position. He doubles down on this claim.
The conversations between Trump and Warsh touched on the possibility of replacing Powell, but Warsh’s advice remained consistent: it is in the best interest of the administration and the economy for Powell to remain in his position until the end of his term.
Warsh would bring deep experience to the Federal Reserve Board as a former member and frequent critic. His deep knowledge of all things economic lends powerful credibility to his prescriptions. His view, quite frankly, shines a light on the importance of why Federal Reserve independence should be preserved. He is similarly aware of the disruptive effects that abrupt leadership transitions can impose.
As this story continues to unfold, one can only wonder how Trump will heed Warsh’s advice in the future. The dynamic between the President and Powell continues to be scrutinized, particularly given Trump’s vocal dissatisfaction with the Fed’s monetary policy decisions.