What do economists think about Trump’s choice of Kevin Warsh to head the Federal Reserve?

President Donald Trump announced Friday that he will nominate Kevin Warsh to be the next head of the Federal Reserve, an independent agency that came under pressure from the president to lower interest rates last year.

If confirmed, Warsh would succeed Fed Chairman Jerome Powell — a former Trump nominee who has drawn the president’s ire for not acceding to his demands — when Powell’s term ends in May.

Warsh served on the Federal Reserve Board of Governors from 2006 until 2011, where he had the opportunity to help shape the U.S. economy during one of the greatest periods of turmoil in modern history. He is now a fellow at the Hoover Institution, a conservative think tank, and a lecturer at Stanford University’s Graduate School of Business, and has also served as an economic advisor to President George W. Bush.

Mark Gertler, an economics professor at New York University, said experts appeared to view Warsh’s nomination with “cautious relief.”

Here are three things to know about Warsh and how he could influence the Fed as the agency’s new head.

1. Warsh is a lawyer, not an economist

Like Powell, Wershe earned a Ph.D., not a Ph.D. In economics. Powell was the first Fed chair in 30 years not to have a doctorate in economics.

“The Fed’s culture is based on economists with Ph.D.s,” said Aaron Klein, a senior fellow in economic studies at the Brookings Institution.

He added: “I think Powell had great respect for the point of view of professional economists.”

But Klein, whom he first met when Warsh was working at the National Economic Council in the White House, may have a different approach. Lawyers view the world through a different cultural lens than macroeconomists do, he said.

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“The question is: Will Kevin fundamentally change the culture of the Fed’s staff? Or will he show deference to the Fed’s Ph.D. economists who are used to running the show?” Klein said.

Gertler said that could influence his political decisions as well. He added that Warsh is not an economist and does not necessarily talk – or think – like one.

“The reason I’m not too worried is that Powell wasn’t an economist either, but Powell learned over time. In fact, I think he learned quite well,” Gertler said. “I hope the same applies to Warsh, that we put him in there with a group of economists and they will help sharpen his thinking.”

2. In many respects, Warsh is a conservative choice

Although he is not a macroeconomist by education, he has a relatively traditional background for a Fed chairmanship candidate, experts said.

He is an academic with experience in the executive branch, as well as on the Board of Governors of the Federal Reserve, and knowledge of financial markets. During his tenure as a member of the board, he was instrumental in helping then-Chairman Ben Bernanke navigate the 2008 financial crisis.

“Warsh is a serious man with a long track record and deep experience,” Klein said. “Warsh was the Fed’s communicator with markets during the financial crisis.”

Gertler said knowledge of financial markets is an important trait in chairing the Fed, because although setting interest rates is not easy, it is “straightforward.” But understanding markets requires “specialized expertise,” which Gertler believes Wershe has.

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Warsh also has a history of being intellectually conservative, looking to limit government intervention in markets, Klein said.

“He’s not an outsider. This isn’t like Pete Hegseth coming in, or Kristi Noem, or anything else. This is someone who has some real experience, who was at the Fed,” Gertler said.

He added: “He did not appear to be overtly political as some of the other candidates did.”

Gertler noted that Warsh likely understands the Fed’s culture and is unlikely to “try to tear the place apart.” He said this gives experts reason for some relief.

Overall, Klein said, Trump is likely to be motivated by pressure from markets, and Warsh is a pick that will reassure investors.

3. Based on his previous and recent statements, it is uncertain how he will handle politics

In the past, Warsh has been a “hawk” on interest rates, meaning that, like Powell, he has been reluctant to lower them for fear of stoking inflation.

But recently, he has changed his tune on the subject. In a November Wall Street Journal op-ed, Warsh said “inflation is a choice,” blamed the Fed for not acting quickly enough and said the agency should cut interest rates.

On the other hand, Warsh has been relatively consistent in his opposition to the Fed’s “quantitative easing” policy, or large-scale asset purchases such as mortgages.

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The Fed currently has more than $6.5 trillion in assets, about $4 trillion more than when Warsh left the board in 2011. Some economists, including Klein, believe this policy has been a major contributor to the extremely tight housing market.

One possibility Klein sees is for Warsh to cut interest rates, which would “stimulate” the economy, and sell off assets, which would likely increase interest rates, meaning the two actions could intersect with each other. The overall economic impact is unclear, because “no one has ever done that.”

“This is where the economics doctor might disagree,” Klein said.

Gertler said Warsh will be just one of many at the Fed who will contribute to the board’s policy decisions.

“He’s not going to come in and be able to do things unilaterally,” he added. “Staff and the rest of the committee will have an impact as well.”