Mr Powell, who is replacing current Federal Chair Janet Yellen, is a Republican and a multi-millionaire
Trump nominates Jerome Powell to lead Federal Reserve
US President Donald Trump has nominated Jerome Powell to lead the country’s central bank, deciding not to reappoint current Federal Chair Janet Yellen.
Making the announcement during a ceremony in the White House Rose Garden, Mr Trump said Mr Powell, a multi-millionaire who is known as “Jay”, had the right qualities to lead the world’s strongest economy.
"He is strong. He's committed. He's smart," and a "consensus builder," Mr Trump said of his choice for Federal chair.
"Based on his record I am confident that Jay has the wisdom and leadership to guide our economy through any challenges that our great economy may face."
Mr Powell, a lawyer who was a former partner of global investment company the Carlyle Group, will need Senate confirmation. However, as a governor on the board of the Federal reserve, he has already been through the Senate approval process.
Mr Trump’s decision to replace the existing chair within the first year of his presidency, and has not been done by a first-term president for 40 years.
Ms Yellen was praised by the president for her leadership, who called her an "absolutely spectacular person".
Mr Powell, a Republican who is worth between $20 million and $55 million (Dh73.5million and Dh202million), has said he supports the administration’s policies on bank deregulation, while backing Ms Yellen’s very gradual interest rate rises.
"Powell allows Trump to change the Fed leadership without changing the basic monetary policy strategy. That strategy has been largely successful," said University of Oregon economist Tim Duy.
Ms Yellen, who has led the central bank since 2014, has been credited with steering the ship to safety as the US recovers from the financial crisis, which began 10 years ago.
After the announcement of Mr Powell’s nomination and congressional Republicans unveiled their tax-cut plan, the Dow ended on a record high.
The Dow Jones Industrial Average gained 0.3 percent to finish at 23,514.81, about 75 points above the prior record set last week.