Trump Calls Warsh for New Fed Chair; Will Mortgage Rates Fall?

Warsh gets Trump’s Fed Chair nomination

Early Friday morning, President Trump announced on his social media platform that he nominated Kevin Warsh as the next Federal Reserve Chairman, succeeding Jerome Powell.

The president made his selection from a short-list of nominees and now Warsh must pass vetting by the U.S. Senate Committee on Banking before being appointed.

Warsh served on the Federal Reserve Board from 2006 to 2011, and was the youngest ever sworn in at age 35. During his time there, he “developed a reputation as a prudent, thoughtful voice on monetary policy,” said Bob Broeksmit, CEO at the Mortgage Bankers Association.

Early speculation surrounding Warsh points towards him bringing a pro-rate cut attitude, given both his background and presumed alignment with President Trump’s stance, based on the nomination.

“For those hoping for interest rate relief from the Federal Reserve in 2026, the nomination of Kevin Warsh as the new Chairman of the Fed should be extremely well received,” said Marty Green, principal at Polunsky Beitel Green. “Warsh’s prior service as a Fed governor will be enormously valuable in steering the Fed toward the lower interest rate environment that the Trump administration has been advocating.”

Trump has repeatedly criticized Powell for resisting faster rate cuts and publicly questioned his leadership, intensifying pressure on the Fed ahead of the 2026 transition. After three-straight rate cuts to end 2025, the Fed held rates at its most recent meeting on Jan. 28. The latest projection materials from December suggested cuts were going to be in store for 2026.

Powell served two consecutive 4-year terms as Fed Chair, first appointed by the Trump Administration in 2018 and reappointed under the Biden Administration in 2022. His final term ends sometime in May.

How will mortgage rates react to the Fed Chair nominee?

Many experts already anticipated a rebounding year for home sales driven by a slow-but-steady rate decline. If the Fed cuts their rates at a higher frequency in 2026, mortgage rates could follow and shoot buyer demand and sales higher.

While the Fed doesn’t set mortgage rates itself, interest rates typically rise alongside increases to the fed funds rate and decrease alongside cuts. However, multiple economic and geopolitical factors influence mortgage rates, making them volatile.

That volatility also makes them harder to predict. Warsh’s potential Chairmanship could stir the market and excite lenders into slightly lower rates based on projection, but his impact wouldn’t officially come until spring.

The Federal Reserve’s next Open Market Committee meeting convenes on Mar. 17-18.

Should you lock in a mortgage rate?

As affordability holds many back from becoming homeowners, falling rates in 2026 would likely be a welcomed sign.

While President Trump’s nomination of Warsh for Fed Chair speculatively suggests a higher likelihood of cuts this year, mortgage rates are influenced by several factors and can be volatile.

The average 30-year fixed rate ended January near three-year lows. Wherever mortgage rates go, negotiating with lenders can help you save, some loans require less upfront, and you may qualify for financial aid, like down payment or closing cost assistance.

If you want to get ahead of potential home buying crowds and begin your equity clock, talk to a local mortgage professional to see what you can qualify for.