President Donald Trump and Fed Chair Kevin Warsh Are on a Collision Course Over Interest Rates, and Things May Get Ugly for Wall Street
Yahoo Finance ·
It's been a history-filled two months for Wall Street and investors. Space Exploration Technologies (SpaceX) etched its name in the record books with the largest-ever initial public offering, while the Dow Jones Industrial Average ( ^DJI +1.14% ) , S&P 500 ( ^GSPC +0.00% ) , and Nasdaq Composite ( ^IXIC 0.80% ) all soared to fresh highs. But the changing of the guard at Wall Street's foremost financial institution, the Federal Reserve, may be the pinnacle of these events. Jerome Powell's second term as Fed chair came to an end on May 15 , allowing President Donald Trump's handpicked successor, Kevin Warsh, to officially become head of the central bank. Although Trump seemingly couldn't usher Powell out the door fast enough -- Powell has chosen to remain on the Board of Governors -- a new Fed chair isn't a panacea for the ideological gap between the president and the Federal Open Market Committee (FOMC) , led by Warsh, over interest rates. Fed Chair Kevin Warsh delivering remarks. Image source: Official White House Photo by Daniel Torok. Shortly after the start of Trump's second, non-consecutive term, he began publicly chastising Jerome Powell and the FOMC for not aggressively lowering interest rates . These vocal criticisms are what made it clear that Powell wouldn't return for a third term as Fed chair.
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