(A)Political - January 31st

Good morning everyone,

Definitely not a slow week on Capitol Hill! Let’s find out why!

Trump nominates Kevin Warsh, a former fed board governor as the next head of the Federal Reserve. A Trump backed Government funding deal has now been passed by the Senate and now heads to the House of Representatives. The DOJ has moved forward (one month passed the deadline) to comply with the Epstein Files Transparency Act signed into law on Nov.19th 2025, and the release covers over 3.5 million pages related to Jeffrey Epstein.

• Kevin Warsh Nominated As Next Federal Reserve Chair

• Senate Passes Gov. Funding Package, Likely Averts Long Shutdown Fears

• DOJ Publishes 3.5 Million Pages Of Documents Involving Jeffrey Epstein

Kevin Warsh Nominated As Next Federal Reserve Chair

_{By: Atlas}

President Donald Trump took to Truth Social yesterday morning and named former Federal Reserve Governor Kevin Warsh as his nominee to chair the central bank, ending a five-month search that began with 11 candidates and concluded with a pick the president called "central casting."

"I have known Kevin for a long period of time, and have no doubt that he will go down as one of the GREAT Fed Chairmen, maybe the best," Trump wrote on Truth Social. "On top of everything else, he is 'central casting,' and he will never let you down."

If confirmed by the Senate, Warsh would replace Jerome Powell, whose term expires in May. The nomination marks the second time Warsh has been a finalist for the top Fed job—he lost out to Powell when Trump made his first selection in 2017.

Speaking to reporters in the Oval Office after the announcement, Trump said he did not ask Warsh to lower interest rates, though they discussed the subject. "I think it's inappropriate," Trump said. "He certainly wants to cut rates. I've been watching him for a long time."

A Fed Veteran Returns

Warsh, 55, is no stranger to the institution he has been tapped to lead. He served on the Federal Reserve Board of Governors from 2006 to 2011, becoming the youngest governor in the central bank's history when President George W. Bush nominated him at age 35.

His tenure coincided with the worst financial crisis since the Great Depression. Warsh played a key role in designing and implementing emergency lending programs aimed at stabilizing credit markets, and he served as the Fed's liaison to Wall Street during the 2007-08 meltdown.

Before joining the Fed, Warsh worked in mergers and acquisitions at Morgan Stanley in New York. He also served in the Bush White House as special assistant to the president for economic policy and as executive secretary of the National Economic Council.

A Stanford graduate with a law degree from Harvard, Warsh is married to Jane Lauder, granddaughter of cosmetics magnate Estée Lauder. His father-in-law, Ronald Lauder, has donated millions to Trump and Republican candidates and was reportedly instrumental in the president's push to acquire Greenland.

Since leaving the Fed in 2011, Warsh has served as a distinguished visiting fellow at Stanford University.

A Critic of the Powell Fed

Warsh emerged from the financial crisis era as a Fed critic. He warned that large-scale asset purchases and near-zero interest rates risked distorting markets and undermining long-term price stability. He voted against the second round of quantitative easing and resigned from the board before his term ended.

That skepticism has only intensified in the years since. In a July 2025 interview, Warsh called for sweeping changes to how the Fed operates, going so far as to advocate for a policy alliance with the Treasury Department.

"We need regime change in the conduct of policy," he said. "The credibility deficit lies with the incumbents that are at the Fed, in my view."

He also sided with Trump's criticism of the Fed for not responding more aggressively to inflation during the COVID-19 pandemic. "Their hesitancy to cut rates, I think, is actually quite a mark against them," Warsh said. "The specter of the miss they made on inflation, it has stuck with them."

Powell has pushed back on suggestions that the Fed needs an overhaul. "If it's a question of using better models, bring them on. Where are they? We'll take them," Powell said at his January press conference. "But I think we certainly are in contact with anybody who does economic modeling, and we're always looking to do better at that."

Market Reaction and What Lies Ahead

Financial markets responded swiftly to the announcement. Silver plunged 30 percent in its worst single-day drop since 1980, while gold prices tumbled sharply. Analysts attributed the selloff to easing fears about Federal Reserve independence—precious metals had rallied in recent months amid concerns that Trump might attempt to exert direct control over monetary policy.

The U.S. stock market initially slumped following the announcement. Mark Malek, chief investment officer at Siebert Financial, said the uncertainty of what lies ahead at the Fed could be the underlying cause.

"Markets hate uncertainty far more than they hate high rates, low rates, or even bad data," Malek said. "It's about the market suddenly having to re-anchor its expectations around a Fed that might look, sound, and behave very differently from the one investors have grown used to over the past decade and a half."

Some analysts see Warsh as a pragmatist who could build consensus on the rate-setting Federal Open Market Committee. "We see Warsh as a pragmatist not an ideological hawk in the tradition of the independent conservative central banker," wrote Krishna Guha of Evercore ISI. "Because he has a hawkish reputation and is seen as independent, he is better placed to bring the FOMC along with him to deliver at least two and plausibly three cuts this year than some rivals."

Fed Governor Stephen Miran praised the selection. "Chairman-designate Warsh has a long history of being an innovative and original thinker on monetary policy," Miran said. "He's got a number of really important insights over the years, and I'm really excited to see all the good work he's going to do at the Fed."

A Difficult Path to Confirmation

Warsh's road to the Fed chair may face obstacles in the Senate. Republican Senators Thom Tillis of North Carolina and Lisa Murkowski of Alaska have vowed to oppose any Trump Fed nominee while the Justice Department conducts a criminal probe into the central bank and Powell.

"Kevin Warsh is a qualified nominee with a deep understanding of monetary policy," Tillis said in a statement Friday. "Protecting the independence of the Federal Reserve from political interference or legal intimidation is non-negotiable."

Tillis said he would only support the nominee when the federal probe is "fully and transparently resolved." His seat on the Senate Banking Committee could hinder Warsh's path through the panel, a key procedural step before a full Senate vote.

Democrats are unlikely to provide much support, particularly after the administration's attempt to fire Fed board member Lisa Cook. The Supreme Court heard arguments in Cook's challenge to Trump's dismissal order last week. A ruling against Cook could give the president unprecedented authority to remove Fed board members and replace them with nominees sympathetic to his views.

House Financial Services Committee Chairman French Hill congratulated Warsh, calling him "a qualified nominee" with "decades of academic and financial market experience."

"He has demonstrated a commitment to fighting inflation and to keeping prices in check for American families," Hill said.

The monetary policy committee voted 10-2 at its January meeting to hold interest rates steady at 3.5 to 3.75 percent. Powell's term as chair expires in May, though he retains a seat on the Fed Board of Governors until January 2028.

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