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Kevin Warsh Is Trump’s Pick to Lead the Fed
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Kevin Warsh, a Federal Reserve insider-turned-critic, is President Trump’s choice to lead the central bank. If confirmed by the Senate, Warsh would succeed Jerome Powell, who has been the target of sustained attacks from the president for not slashing interest rates. Powell’s term as chair expires in mid-May.
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Kevin Warsh previously served as a Federal Reserve governor. PHOTO: Tierney L. Cross/Bloomberg News
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President Trump said Friday he would nominate Kevin Warsh to be the next chairman of the Federal Reserve, choosing a former Fed official who has aligned himself with the president’s criticism of the central bank. “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. On top of everything else, he is ‘central casting,’ and he will never let you down,” Trump said in a post on his social-media account.
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A Weaker Dollar Has Always Been Part of Trump’s Plan
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A weaker dollar typically puts upward pressure on inflation. Photo: David Paul Morris/Bloomberg News
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President Trump’s disclosure Tuesday that he was pleased with a weaker dollar should in theory not matter. His preferences are well-known and words shouldn’t move markets unless backed by action, writes WSJ's Greg Ip. In this case, though, expect action to back these words. Last week the Federal Reserve on behalf of the Treasury made inquiries on the value of the yen, seen as a prelude to selling dollars in exchange for yen, possibly in cooperation with the Japanese authorities. The dollar’s decline isn’t run-of-the-mill market noise, but the natural result of the U.S. giving priority to the dollar’s domestic role over its global one. This doesn’t by a long shot spell the end of its reserve
status. But it is another tremor shaking up assumptions about the global economy.
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U.S. Jobless Claims Remain Subdued Last Week
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U.S. jobless claims fell last week and remained consistent with contained layoffs. The number of people who filed for unemployment benefits fell to 209,000 in the week through Jan. 24, down from 210,000 a week earlier.
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U.S. Factory Orders Rose in November
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Orders from U.S. factories rose 2.7% in November to $621.6 billion, from $605.4 billion in October. Economists polled by The Wall Street Journal were expecting a 1.3% increase.
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U.S. Trade Deficit Grew in November
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The U.S. trade deficit rebounded in November, the Commerce Department said Thursday, extending a turbulent stretch for international trade flows as the economy responds to the Trump administration’s tariffs and financial volatility.
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Key Developments Around the World
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South African Reserve Bank Keeps Key Rate Unchanged
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The South African Reserve Bank maintained its main repo rate at 6.75% on Thursday as it weighs steady inflation, low oil prices and a stronger rand against global geopolitical uncertainty.
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Tokyo Inflation Slows in New Signal for Bank of Japan
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Eurozone Posts Resilient 2025 Growth Despite Tariff Turbulence
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The eurozone economy last year expanded at its fastest pace since 2022 despite higher U.S. tariffs, and seems set for continued modest growth as increased government spending on defense and the repair of frayed infrastructure kicks in.
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Poland’s Economy Set to Enter Global Top 20
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Poland’s economy hit $1 trillion in 2025, likely lifting it into the world’s top 20. Three-and-a-half decades ago, under an isolated communist regime, Poland was nearly as poor as Jamaica after adjusting for price levels. Today it is richer than Japan.
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Irish Economy Soared in 2025 on Weight-Loss Drugs Boom
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Ireland’s economy soared last year, lifted by its close ties to the U.S. even as President Trump raised tariffs on imports from Europe and urged businesses to bring more of their overseas production back home.
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Taiwan’s Economy Grew at Fastest Pace in 15 Years
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Taiwan’s economy expanded at the fastest pace since 2010 last year as it cashed in on the artificial-intelligence boom. Gross domestic product rose 8.63% in 2025, accelerating from 5.27% in 2024 and beating economists’ expectations for a more than 7% increase.
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Trump Regulators Ready to Lay Out Crypto Rules to Foster Growth
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President Trump’s regulators said they were ready to lay out rules that would help foster the crypto industry’s growth after legislation on the matter ran into an unexpected setback.
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First Brands Founder Patrick James Charged
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First Brands Group founder Patrick James and his brother Edward were indicted by federal prosecutors on charges of defrauding lenders ahead of the auto-parts company’s collapse into bankruptcy.
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8:30 a.m.: U.S. PPI
8:30 a.m.: Canada GDP
1:30 p.m.: St. Louis Fed President Alberto Musalem speaks at University of Arkansas luncheon
5 p.m.: Vice Chair for Supervision Michelle Bowman speaks about monetary policy and regulation
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6:50 p.m.: Bank of Japan's summary of opinions
7:30 p.m.: Japan manufacturing PMI
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4 a.m.: Eurozone manufacturing PMI
4:30 a.m.: S&P Global U.K. manufacturing PMI
9:30 a.m.: Canada manufacturing PMI
9:45 a.m.: U.S. manufacturing PMI
10 a.m.: ISM report on business manufacturing PMI
11 a.m.: Global manufacturing PMI
12:30 p.m.: Atlanta Fed President Raphael Bostic participates in Rotary Club of Atlanta event
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U.S. Treasury Curve Could Steepen if Warsh Picked as Next Fed Chair
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U.S. Treasurys could steepen if former Fed governor Kevin Warsh is nominated as the next Federal Reserve Chair, TD Securities' strategists say in a note. The anticipated steepening would be driven by a faster fall of short-term yields than long-term rates, the strategists say. If BlackRock's fixed income chief Rick Rieder is nominated as Fed Chair, Treasurys would likely flatten, driven by a faster fall of long-end yields than short-end yields. In either case, however, TD Securities expects the reaction to be short-lived as the new Chair would need to convince the rest of the committee. U.S. President Trump's advisors have been told that he is expected to nominate Warsh, potentially as early as Friday. —Emese Bartha
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BOE Expected to Lower Near-Term GDP Forecasts at Next Meeting
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The Bank of England is expected to lower its near-term U.K. GDP forecasts during its rate decision meeting on Feb. 5, Deutsche Bank's Sanjay Raja says in a note. However, the BOE's medium-term GDP forecasts are likely to be raised "on the back of supportive conditioning assumptions", Raja says. Markets price in a 97% chance that the BOE will keep interest rates unchanged at 3.75% in February, LSEG data show. —Miriam Mukuru
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Canada's trade deficit ballooned in November as gold shipments remained volatile and vehicle movements fell, though there again were early signs the country is diversifying away from its dependence on the U.S. Canada recorded a merchandise-trade shortfall of almost 2.2 billion Canadian dollars, the equivalent of about US$1.62 billion. That was much wider than the C$690 million deficit economists expected and October's downwardly revised C$395 million gap. Including services, Canada swung to a trade deficit of C$2.19 billion from a small C$27 million a month earlier. (Dow Jones Newswires)
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WSJ Pro Central Banking brings you central banking news, analysis and insights from WSJ’s global team of reporters and editors. This newsletter was compiled by Michael Maloney in New York and Nihad Ahmed in Barcelona.
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