Kevin Warsh has been preparing to lead the Federal Reserve for more than a decade. He thought he had the job in 2017, but President Trump had doubts. Warsh looked too young, and his history of worrying about inflation suggested he might not keep rates as low as Trump wanted. Trump picked Jerome Powell instead. Warsh kept at it—criticizing Powell publicly, cultivating ties to Trump’s circle, and touting the president’s economic agenda. Now, at 55 years old, he finally is set to have the job.

Kevin Warsh’s nomination as Fed chair could mark the most significant changing of the guard at the central bank in generations. In 1979, Paul Volcker took over the central bank and dramatically reoriented its approach to inflation. Alan Greenspan took over from Volcker in 1987, and he and every chair since has emphasized continuity with his or her predecessor. Warsh has promised a clear rupture—a wholesale rethinking of the Fed’s asset holdings, policy framework, role in the economy, and relationship with the executive branch.

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Atlanta Fed President Raphael Bostic reiterated his view that inflation remains too high and the Fed should return to its 2% target in a CNBC interview. "We are still too high on inflation, so I think we need to be somewhat restrictive," he said. Bostic expects there will be some tariff impacts on the economy in the first half of this year. Bostic said that while he doesn't know President Trump's pick for Fed chair, Kevin Warsh, very well, he has heard he is thoughtful and "someone who you can really engage with." (Dow Jones Newswires)

Kevin Warsh has spent much of the last 15 years criticizing the Federal Reserve for getting too big, mismanaging inflation and compromising its independence, writes WSJ's Greg Ip. So as President Trump’s pick to succeed Jerome Powell as chair of the central bank, what does he do about it? He faces three key tests. First, significantly shrink the Fed’s balance sheet without upsetting markets. Second, push inflation down to 2% and keep it there. Third, do this without meddling by Trump that compromises the Fed’s independence. All will be tougher than they look.

U.S. jobs data will come back into focus this week as investors assess the likely timing of the next Fed interest-rate cut after President Trump announced Kevin Warsh as the next chair once Jerome Powell’s term ends in May. Also, central-bank decisions are due from the European Central Bank, the Bank of England and the Reserve Bank of Australia, with the RBA expected to raise interest rates as inflation rises strongly.

President Trump said he is nominating economist Brett Matsumoto to head the Bureau of Labor Statistics. The choice elevates a career staffer to run the federal government’s leading agency for economic statistics, which has been without a commissioner since Trump fired its previous chief on Aug. 1 out of frustration with numbers that showed bad news about the job market.

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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
2 p.m.: Fed senior loan officer opinion survey on bank lending practices
10:30 p.m.: Reserve Bank of Australia monetary policy statement

4 a.m.: ECB bank lending survey
8:55 a.m.: Johnson Redbook retail sales index
10 a.m.: Job openings and labor turnover survey
7:30 p.m.: Japan services PMI

• Business activity in the Chicago area rose for the first time in more than two years in January, driven by increases in employment, new orders and production, a monthly survey showed Friday.
• Canada’s economic recovery stumbled in the final quarter of last year as good-producing industries struggled with supply-chain bottlenecks and the continued weight of tariffs and uncertainty.
• A private gauge of China’s manufacturing sector showed Chinese factories continued to expand activity in January, with production growing at a faster pace amid more new orders.
• Asian manufacturers started the year on a strong note, with factory activity ticking up in major exporters like Japan and South Korea, and business sentiment brightening.
• Australia's employment market remained strong, with job ads climbing at their fastest monthly place in nearly four years in January. Job ads rose 4.4% on month in January following a downwardly revised 0.8% decline in December, according to a survey by ANZ and job-search portal Indeed. (Dow Jones Newswires)
• French drivers bought fewer new cars at the start of 2026 against a weak economic backdrop. 

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.