Larry Kudlow's Fed Chair Advocacy: "Trumponomics" and the "Two Kevins" Selection

Larry Kudlow’s op-ed published on Fox Business represents a significant intervention in the ongoing Federal Reserve Chair nomination process [5]. As a former NEC Director under Trump and current influential voice on Fox Business, Kudlow occupies a unique position as both a policy confidant and media personality capable of shaping public perception around the nomination. The timing of this opinion piece—just days before Trump’s anticipated final decision—suggests it may serve as a deliberate signal to financial markets and political stakeholders regarding the preferred candidate profile [2].

The editorial framework employs the term “Trumponomics” to describe an economic philosophy emphasizing supply-side productivity, deregulation, and tax reform as drivers of economic growth. Kudlow’s central thesis—that the Fed Chair should “embody the new Trumpian economy”—raises important questions about the appropriate balance between monetary policy independence and executive branch economic priorities [5]. This framing represents a departure from traditional Fed independence norms and signals potential expectations for policy alignment with the administration’s economic agenda.

The two candidates Kudlow endorses represent distinct pathways for Fed leadership:

has emerged as the leading candidate according to multiple reports [2][3]. His background as a former Fed Governor from 2010-2018 provides institutional credibility while his current position as a fellow at Stanford University positions him as an academic-market hybrid. Market participants have generally favored Warsh due to his understanding of financial market dynamics and his track record during the 2015-2016 period of policy uncertainty. His candidacy represents a middle ground between establishment credentials and potential policy innovation.

, currently serving as NEC Director, has reportedly been told by Trump to “stay where you are” according to recent reporting [1][2]. This suggests his inclusion in Kudlow’s editorial may reflect past consideration rather than current viability. Hassett’s background as former Council of Economic Advisers Chair (2008-2009) and his close working relationship with the administration would make him the most politically-aligned candidate, potentially raising heightened concerns about Fed independence.

Recent market data indicates elevated volatility surrounding the Fed nomination uncertainty [0]. The S&P 500 experienced a decline of approximately 1% on January 20, followed by a recovery to +2.2% by January 26 [0]. This pattern suggests markets are actively processing nomination signals and adjusting expectations based on candidate positioning. The fluctuation magnitude, while not extreme, indicates meaningful uncertainty regarding the policy implications of different potential appointments.

Other candidates under consideration include current Fed Governor Christopher Waller, Vice Chair Michelle Bowman, and Rick Rieder of BlackRock [2]. The presence of these establishment candidates on the shortlist suggests Trump continues to weigh market-friendly alternatives against his apparent preference for policy-aligned leadership.

Kudlow’s explicit advocacy for a “politically-aligned” Fed Chair represents a notable shift in the public discourse around monetary policy independence. The editorial argument that “supply-side productivity boom does not cause inflation” challenges conventional Fed models that have historically emphasized inflation risks associated with economic overheating [5]. Should the administration successfully appoint a Chair who subscribes to this alternative framework, it could signal a fundamental reconceptualization of the Fed’s policy tolerance and operational approach.

The nomination process occurs during a period of broader institutional transition. With multiple Fed positions potentially changing hands—including the Vice Chair role—the incoming Chair will have significant influence over the direction of monetary policy and the composition of the Federal Reserve’s policy-setting committees. This transition creates both opportunity for policy recalibration and risk of coordination challenges during a period of ongoing economic uncertainty.

Kudlow’s dual role as former NEC Director and Fox Business host illustrates the increasingly blurred boundaries between government service, media commentary, and public persuasion. The editorial serves multiple functions: signaling administration preferences, shaping market expectations, and potentially testing public and Congressional reaction to different candidate profiles.

: The potential for a leadership change introduces uncertainty regarding the trajectory of monetary policy. Historical precedent suggests Fed nomination announcements can trigger short-term market volatility as investors recalibrate expectations for interest rate paths, inflation targets, and regulatory approaches [0]. The extent of policy deviation will depend heavily on the selected candidate and their confirmation messaging.

: Kudlow’s characterization of supply-side growth as non-inflationary represents a theoretical position that conflicts with conventional Phillips Curve frameworks historically employed by the Fed [5]. If this alternative view gains ascendance within Fed leadership, it could lead to higher tolerance for economic overheating and potential inflationary consequences.

: The Senate confirmation process for any Fed Chair nominee will likely involve scrutiny of their views on independence, their relationship with the administration, and their policy positions. A highly politicized nomination could complicate the confirmation timeline and introduce additional market uncertainty.

: An appointment aligned with the administration’s economic philosophy could enable coordinated fiscal-monetary policy approaches that have been constrained by traditional Fed independence norms. This coordination could support initiatives around infrastructure investment, deregulation, and structural reform.

: Trump’s indication that he is “down to maybe one” candidate [4] suggests an imminent announcement, which would reduce the current period of uncertainty. A clear resolution, even if the direction differs from market preferences, typically allows markets to adjust and incorporate new information.

The Federal Reserve Chair nomination remains a critical pending decision with significant implications for monetary policy direction and market expectations. Larry Kudlow’s January 26, 2026 editorial advocacy for a “Trumponomics-aligned” Chair and endorsement of “one of the two Kevins” provides insight into the administration’s candidate preferences [5]. While Kevin Warsh appears positioned as the leading candidate based on recent reporting [2][3], Kevin Hassett’s continued presence in the discussion despite reports he will remain in his NEC role highlights the fluid nature of the selection process.

Market indicators show the S&P 500 has navigated nomination uncertainty with approximately 2.2% volatility this week [0], reflecting the significance investors attach to this decision. The forthcoming appointment will test the boundaries between monetary policy independence and executive branch economic coordination, with implications extending beyond the immediate nomination to the longer-term trajectory of Fed policy frameworks and institutional relationships.