Wosh takes the top spot as Fed Chair, Trump seeks to weaken the central bank's independence

On December 13th, U.S. President Trump announced Kevin Warsh as the leading candidate for the next Federal Reserve Chair. This decision carries a certain degree of drama—Warsh was not widely favored before, but after a direct meeting with Trump, the situation reversed.

Trump also mentioned two other strong contenders, including Kevin Hasset, Director of the National Economic Council. Hasset was considered a frontrunner, but he expressed reservations about taking on the role, which opened up space for Warsh to rise.

Notably, Trump reiterated that the Federal Reserve Chair should consult with the President when setting interest rate policies. This stance essentially challenges the traditional independence of the Federal Reserve. For a long time, the Fed’s policy decisions have been independent of political interference, which is considered the foundation of its effective performance. If the President’s opinions become a factor in interest rate decisions, it would break this convention and could impact financial market stability and the credibility of monetary policy.

Warsh’s sudden rise reflects Trump’s tendency to seek greater influence over personnel decisions, and the issue of Federal Reserve independence involved in this process has become a focal point for the financial industry and policymakers.