WASHINGTON — With Congress and the administration still in negotiations to pass bills to keep the federal government open past today, the other news development in Washington of interest to credit unions is that President Donald Trump is poised to nominate former Federal Reserve governor Kevin Warsh to be the next chair of the Federal Reserve.
That move that would reshape monetary policy leadership as Jerome Powell’s term expires this spring. (Separately, the CU Daily today will have coverage today of any deals/no deals on funding the federal government, which hinges on Democrats’ concerns around the Department of Homeland Security and ICE).
Trump plans to formally announce his choice of Warsh today, saying the nominee will be “very respected” and well-known in financial circles, multiple media outlets have reported. Warsh, 55, served on the Fed’s Board of Governors from 2006 to 2011 and has remained influential in economic policy debates since leaving Washington.
Political Pressure
If confirmed by the Senate, Warsh would replace Powell, whose term as chair ends in May and whose leadership has drawn presidential criticism for not cutting interest rates quickly enough to stimulate economic growth. Powell has underscored the Fed’s independence from political pressure.
Numerous analysts have said Warsh’s nomination is seen as a potential signal of a shift in monetary strategy. Markets reacted positively to the news that he would likely be chosen, with the U.S. dollar strengthening as investors viewed him as an experienced, steady hand.
Deep Connections
A former Wall Street executive and Hoover Institution fellow at Stanford University, Warsh would bring decades of public and private sector experience to the job. During his time at the Fed, he played a key role in policy decisions around the 2008 financial crisis and built deep connections with global financial leaders, analysts have noted.
Warsh’s nomination has stirred debate among lawmakers, with some expressing concern about preserving the Fed’s independence amid broader political pressure on U.S. central banking. The nomination will now advance to confirmation hearings in the Senate, where Warsh’s views on inflation, interest rates and economic stability are expected to face intense scrutiny.
As the CU Daily reported, the Fed adjourned after two days of meetings this week without making any changes to interest rates, and many are predicting it will not make any more changes until after Powell’s term ends.
America’s Credit Unions Responds
“America’s Credit Unions congratulates Kevin Warsh on his nomination to lead the Federal Reserve. Mr. Warsh’s previous experience serving on the Fed Board of Governors and economic advisory roles makes him well equipped to drive the central bank’s monetary policy,” America’s Credit Unions President and CEO Scott Sullivan said in a statement. “At a time when American families and policymakers are focused on affordability, this announcement reinforces the importance of stability and confidence in our economic system. We look forward to learning more about Mr. Warsh’s priorities as he moves through the confirmation process. America’s Credit Unions has a strong relationship with the Federal Reserve to ensure credit unions and their 145 million members are represented in these important conversations.”
Defense Credit Union Council Responds
In a statement, Jason Stverak, chief advocacy officer with the Defense Credit Union Council, said, “Mr. Warsh brings significant experience from his prior service on the Federal Reserve Board of Governors and a deep background in financial markets and monetary policy, and we look forward to engaging with him and his team as he advances through the confirmation process. America’s defense credit unions and the 40 million military, veteran, and family members they serve depend on a stable, transparent, and effective central banking system that supports responsible credit access, financial readiness, and resilient markets. As we have recently articulated in our advocacy, including real-time payments, interchange fee standards, emergency liquidity access, and broader financial inclusion, credit unions benefit when regulatory frameworks are clear, balanced, and tailored to the unique mission-driven institutions that serve servicemembers and communities nationwide.
“We have raised concerns in the past about proposals that could inadvertently undermine consumer protections, weaken access to affordable financial services, or impede credit unions’ abilities to support critical member needs. Those priorities remain at the forefront of our engagement with federal regulators, including the Federal Reserve. DCUC stands ready to work constructively with Mr. Warsh on issues facing our member credit unions from ensuring Fed-led payment systems like FedNow remain accessible, secure, and cost-effective for institutions of all sizes, to supporting responsible oversight of payment network rules that impact interchange and fraud protection, to championing a transparent Fed that upholds independence while fostering conditions that support economic opportunity and military financial readiness.
“Credit unions are integral partners in the nation’s financial system, particularly for those who serve or have served our country,” adds Stverak “As Mr. Warsh’s nomination progresses, DCUC looks forward to engaging with the Fed Chair nominee, congressional leaders, and fellow stakeholders to advocate for policies that strengthen the financial well-being of military and veteran families and ensure robust, stable markets for all Americans,” Stverak concluded.
