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Dharshini David
Deputy economics editor

Image source, Getty Images

Kevin Warsh, a Wall Street veteran and a former Federal Reserve member, faces one of the world’s most coveted policymaking jobs – but perhaps also one of the trickiest.

This selection process has not just been about who gets to be the world’s most powerful banker – but also the future of the central bank’s independence.

Kevin Warsh is a rare candidate who appears to appease both the president and investors.

Warsh believes that rates should be lower and that the AI revolution can help contain inflationary pressures – aligning with the president.

Meanwhile, some investors believe Warsh’s track record on taking a tough line on inflation during his previous stint as Fed Chair hints at a pragmatic approach.

He now undergoes a Senate confirmation, where there is resistance to appointing a new chair while an investigation into the present chair is ongoing.

And then, once in post, he will need to prove his credibility to markets, coping with political pressure to cut rates amid a weakening jobs market – while also trying to balance the need to curb inflation.

President Trump has acknowledged that however amenable candidates may appear beforehand, they tend to pick their own path once in post.

Economists suggest Warsh may choose not to push for rate cuts immediately, to underscore that independence at America’s central bank has been maintained.