President Donald Trump’s nomination of Kevin Warsh for Federal Reserve chair has diminished the likelihood of Jerome Powell remaining at the central bank following the conclusion of his chairmanship in May, according to one strategist. Historically, chairs have resigned from the Fed following their tenure. Nonetheless, Powell has consistently declined to address inquiries regarding whether he will follow suit, as the central bank grapples with issues surrounding its autonomy. Powell retains two years remaining in his term as governor, should he choose to continue in the role.

However, Warsh may influence the outcome due to his longstanding appreciation for the autonomy of central banks and his awareness of the potential threats to price stability. “He never dissented from any FOMC decision despite his concern that the balance of risks were still shifted in favor of price stability in the middle of the GFC (in March 08 the month Bear Stearns blew up, in June and again in September),” noted Peter Corey.

“Even in Q3 2009, he expressed concerns regarding a surge in lending and its potential inflationary effects.” Furthermore, he maintained a strong opposition to quantitative easing. “I would think the chances of Powell feeling he must stay on have diminished greatly,” Corey stated.