On 30th January , United States President Donald Trump decided that former Federal Reserve Governor Kevin Warsh should become the new leader of the central bank of the country at the time when Jerome Powell will leave his leadership position in May, providing another tilt credit, an opportunity to introduce his vision of the change in the monetary policy regime into practice at a time when the White House has advocated more influence on the rate-setting process.

“Kevin is someone I have long known, and I am confident that he will leave behind him, as one of the GREAT Fed Chairmen, perhaps the greatest. What is more, he is central casting, he will never fail you,” Trump said, as he announced his new step to stamp his name on a Fed he has continued to attack over recent years as failing to give in to his demands of making deep cuts in the borrowing rates.

World stocks crept up, and the dollar improved as the price of gold crashed as Trump named his choice of Warsh, someone whose policies in the markets are seen as someone who would uphold lower rates but would fall far short of the bolder, easier style of several of the other candidates.

Trump made the nomination, which has to be confirmed by the US Senate, in a social media post. The president has not put any such public events on his schedule on Friday, related to the Fed.

It is not clear how fast Warsh can go through a closely divided Senate in his nomination. One of the Republicans on the Senate Banking Committee, which will be the first committee to consider the nomination, has already made a repeated commitment not to back any nominee to the Fed as long as the Department of Justice that Trump leads still carries out a criminal investigation of Powell that became public earlier this month.

“I will not change my stance: I will reject the confirmation of any Federal Reserve nominee, including that of Chairman, until the DOJ investigation of Chairman Powell is completely resolved transparently,” said Senator Tim Scott of South Carolina in a post on X.

The Republicans currently have a 13-11 majority on the committee, and all Democrats are most likely to vote against the nomination of Warren, and so Tim Scott would tie up the panel in case he continues to vote the same way he is doing.

Other Republican senators in the panel, however, said that Warsh would be a good Fed independence candidate.

“Nobody is in a better position to guide the Fed and bring our central bank back to its founding statutory mission,” a social media post by Senator Bill Hagerty said.

Its independence from politics has been regarded as a stabilising force in the world financial markets, and Trump’s escalating his attempts to challenge it will be a major concern in the process of approval.

It has also paved the way to the fact that Powell, who termed the criminal investigation as a pretext to coerce the Fed to set monetary policy the way the president wants it to be set, may decide to remain at the Fed as a governor even after his leadership as the Fed chairman has expired in an attempt to protect the independence of the bank.

The nomination is the culmination of a several-month-long process that frequently amounted to a kind of public audition as Warsh, White House economic advisor Kevin Hassett and other leading candidates, including sitting Fed Governor Christopher Waller and Wall Street insurer Rick Rieder, had been almost daily on television to sell their credentials and demonstrate their ideas about the economy and Fed policy.

In August, Trump appointed White House economic adviser Stephen Miran to a vacant governor position on the Fed, where he has emerged as a champion of the radical rate cuts Trump has long desired. Another fight that Trump has engaged in before the Supreme Court that, had he succeeded, would be the first instance of a president ousting a central bank chief; he has attempted to do so against Fed Governor Lisa Cook.