Kevin Warsh, a potential Federal Reserve chair pick by President Donald Trump, called for a major overhaul of the central bank during a CNBC interview Thursday.

Warsh said the U.S. needs a new "Treasury-Fed Accord" similar to the one established in 1951, describing the current economic situation as a "transformational moment" in economic history.

"The last thing we need is ’continuity’ at the Fed," Warsh stated, pointing to what he called a "credibility crisis" at the central bank.

While emphasizing that he "strongly believes" in the Fed’s independence, Warsh criticized the institution for focusing on diversity, equity and inclusion (DEI) and "full inclusive employment," calling this a "key mistake."

Warsh directly blamed the Federal Reserve for inflation and suggested its hesitancy to cut interest rates represents a further loss in credibility.

He also expressed support for President Donald Trump’s public criticism of the Fed, saying "Trump is right to be pushing Fed publicly."

Warsh concluded that the Federal Reserve "must get out of fiscal, political business" to restore its effectiveness and credibility.