WASHINGTON, D.C.: President Donald Trump's decision to nominate Kevin Warsh as the next chair of the Federal Reserve places a former central bank official with deep policy experience and close ties to Trump's orbit at the helm of the world's most powerful monetary authority, raising questions about the future direction and independence of the Fed.

If confirmed by the Senate, Warsh would replace current Chair Jerome Powell when Powell's term expires in May. Trump, who appointed Powell in 2017, has repeatedly criticized him this year for not cutting interest rates more aggressively.

The nomination is expected to draw intense scrutiny from lawmakers and financial markets, given Trump's public demands for much lower rates than many economists believe current conditions justify. Whether Warsh can balance Trump's expectations while preserving the Fed's long-standing independence from political pressure will be one of the central challenges of the job.

Supporters say Warsh has the temperament and skills to navigate that tension.

Warsh has "a judicious temperament and both the intellectual understanding but also the hopefully diplomatic talents to navigate what is a challenging position at this point," said Raghuram Rajan, an economics professor at the University of Chicago and former head of India's central bank.

Trump voiced strong confidence in his pick. "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," Trump posted on social media Friday. "On top of everything else, he is ‘central casting,' and he will never let you down."

Later in the Oval Office, Trump said he had not asked Warsh to commit to cutting rates, calling such a request "inappropriate" and adding, "I want to keep it nice and pure." He then added, "But he certainly wants to cut rates."

Warsh, 55, previously served on the Fed's board from 2006 to 2011 and was the youngest governor in the institution's history when appointed at age 35. He is currently a fellow at the Hoover Institution and a lecturer at Stanford's Graduate School of Business.

In some respects, Warsh is an unusual choice for Trump. During and after the 2008–09 financial crisis, Warsh frequently objected to the Fed's low-rate policies and warned inflation could accelerate — concerns that did not materialize for years. Trump, by contrast, has said the Fed's benchmark rate should be as low as 1 percent, far below its current level of roughly 3.6 percent.

More recently, Warsh has expressed support for lower interest rates in speeches and opinion columns, a shift that has drawn skepticism from some lawmakers.

Markets reacted swiftly to the announcement. The dollar and long-term Treasury yields edged higher, U.S. stocks fell about 0.5 percent, and metals prices dropped sharply, with gold down more than 5 percent and silver falling over 13 percent.

On Capitol Hill, Republican Senator Thom Tillis of North Carolina said he would oppose Warsh's confirmation until a Justice Department investigation involving Powell is resolved, despite calling Warsh a "qualified nominee." Senate Majority Leader John Thune said Warsh likely could not be confirmed without Tillis's support.

Democratic Senator Elizabeth Warren of Massachusetts accused Warsh of reshaping his views to align with Trump.

"I don't know how to interpret that, except to say that's exactly what a sock puppet does," she said. "If Donald Trump says it, then Kevin Warsh echoes it, even though it contradicts everything he had done for years."

Warsh has also criticized the Fed's US$6.6 trillion balance sheet, arguing that large-scale bond buying enabled excessive government spending. In a November Wall Street Journal column, he wrote: "Inflation is caused when government spends too much and prints too much."

If confirmed, Warsh would lead a central bank already under pressure from Trump, who has sought greater control over the Fed. Though Trump considered Warsh for the job during his first term, he ultimately chose Powell.

Warsh's family ties may further complicate perceptions of independence: his father-in-law is Ronald Lauder, a longtime Trump donor and confidant.

Even with the chair's influence, Warsh would be only one vote on the Fed's 19-member rate-setting committee, where divisions remain over inflation risks and signs of economic slowdown, and where markets could ultimately impose their own discipline if confidence in the Fed's independence wavers.