Sets up a confirmation fight over Fed independence: The nomination formalizes a leadership transition after sustained political criticism of the current chair’s rate decisions, putting the central bank’s autonomy at the center of the confirmation process.

Raises the odds of a tighter policy stance: Warsh is widely viewed as more hawkish than recent Fed leadership, which increases the likelihood that inflation control is prioritized over faster growth if he is confirmed.

Signals potential push to shrink the Fed’s balance sheet toolkit: Warsh’s past opposition to large-scale asset purchases suggests less tolerance for quantitative easing and a preference for limiting or reversing balance-sheet expansion.