Kevin Warsh, former Federal Reserve governor and one of Donald Trump’s top candidates to lead the central bank, launched a fierce critique of the Fed’s current leadership – especially Jerome Powell. In a Thursday interview with CNBC, Warsh held nothing back.

He declared that the Fed needs a radical regime change, and he clearly sees himself as the man to lead it. Warsh accused Powell of lacking credibility and criticized the Fed’s sluggishness in cutting interest rates. “The current leadership is failing,” he stated bluntly.

💣 Warsh Is Not Just Talking – He Wants to Take Over

Warsh doesn’t pretend to be a neutral observer. In the interview, he positioned himself as someone with a clear agenda: replace Powell, overhaul the Fed’s current strategy, and establish a closer partnership with the U.S. Treasury.

This aligns perfectly with Trump’s long-standing attacks on Powell, including calls for lower rates and accusations of mismanagement. Warsh openly supports this line – this isn’t coincidence, it’s positioning. He claims that under his leadership, the Fed would no longer act in isolation.

🎯 “They’ve Lost Trust,” Warsh Says of Powell’s Team

Warsh didn’t limit his criticism to Powell. He took aim at what he called the “survivor bureaucracy” running the Fed, accusing them of losing public trust. Their hesitation to cut interest rates, he argued, proves they’re out of touch.

He also endorsed Trump’s strategy of publicly pressuring the Fed. “The president is right to push publicly because we need a regime change in monetary policy,” Warsh stated. He made no effort to appear neutral – he wants Powell gone.

🏛️ Warsh Joins Criticism of Fed’s Costly Real Estate Projects

Warsh didn’t defend Powell when asked about the controversial multi-million-dollar renovation of two Fed buildings in Washington, D.C. Instead, he distanced himself. When asked directly whether Trump should fire Powell, Warsh remained composed but firm: “I think a regime change at the Fed will come in due time.” That’s about as close to a “yes” as you can get without actually saying it.

💡 Warsh Wants a Modern “1951 Accord” Between Fed and Treasury

Warsh went on to propose a bold idea – a renewed collaboration between the Federal Reserve and the U.S. Treasury to tackle the country’s $36 trillion debt.

He referenced the 1951 Accord, which separated monetary policy from Treasury control after World War II. Today, however, Warsh believes the two institutions are working at cross-purposes, and it’s time for a new agreement. In his view, the Fed Chair and the Treasury Secretary should speak to markets together and set clear goals for the Fed’s balance sheet.

📉 Fed Is Acting Alone – and Doing It Wrong, Warsh Says

Although Warsh said he generally supports quantitative tightening (QT), he criticized the way it’s being handled. Currently, the Fed is reducing its balance sheet by letting bonds roll off without reinvestment – and doing it without coordinating with the Treasury, which Warsh sees as a major flaw.

“The Fed has the wrong balance,” he said. “Cutting interest rates is the first step in finding the right one.” That’s a direct shot at Powell’s current policy path.

❗️ There's a Catch: Bond Yields Didn’t Behave Last Time

There’s one issue Warsh didn’t mention: When the Fed last cut rates, Treasury yields didn’t fall – they rose. That undermines the argument that rate cuts will reduce debt servicing costs. Warsh conveniently avoided that contradiction.

⚖️ Warsh Checks All the Boxes for Trump

Publicly aligning with Trump, demanding lower interest rates, challenging Powell’s judgment, and calling for Fed–Treasury coordination – Warsh has checked every box on the Trump team’s wishlist.

If Trump’s goal is to shake the foundations of the Fed, then Kevin Warsh is making it clear: he’s ready to swing the hammer.

#Powell , #FederalReserve , #Fed , #TRUMP , #USPolitics

Stay one step ahead – follow our profile and stay informed about everything important in the world of cryptocurrencies!

Notice:

,,The information and views presented in this article are intended solely for educational purposes and should not be taken as investment advice in any situation. The content of these pages should not be regarded as financial, investment, or any other form of advice. We caution that investing in cryptocurrencies can be risky and may lead to financial losses.“