Kevin Warsh faces tough questions at Fed chair confirmation hearing
Federal Reserve chairman nominee Kevin Warsh faced pointed questions from senators over the ethics of the Fed’s independence and pressure from President Trump.
Former Federal Reserve Governor Kevin Warsh was approved by the Senate for a new 14-year term on the Fed’s Board of Governors on May 12, moving him one step closer to becoming the central bank’s next chairman.
The vote to confirm President Donald Trump’s nominee was split 51-45 along partisan lines, with Republicans supporting it and Democrats generally opposing his confirmation. Lawmakers will next begin the process of approving Mr. Warsh, a former Treasury executive, for a four-year term as Fed chairman. Senators are expected to vote on it within days.
Mr. Warsh, who has pushed for new tools and a different inflation framework from the central bank, is expected to take the seat of Fed Chairman Stephen Milan on the seven-member Federal Reserve Board. President Trump appointed Millan in August to serve out the remainder of former Gov. Adrianna Coogler’s term, which technically ends on January 31st, but Millan remained in the position until a replacement was confirmed.
Jerome Powell, whose term as chairman ends on May 15, said he will remain on the Fed’s board until January 2028, when his term does not expire. Although the move breaks precedent for stepping down as chairman, Mr. Powell said he intended to “keep a low profile.” His decision comes amid lingering concerns about the central bank’s independence due to the president’s persistent calls for interest rate cuts and the now-dropped criminal investigation against Mr. Powell, which had previously made Mr. Warsh’s confirmation difficult.
A lawsuit stemming from President Trump’s attempt to fire Federal Reserve Board Director Lisa Cook last year is underway.
Mr. Warsh rejoins the board at a time when policymakers are somewhat divided about the best path for the federal funds rate, the benchmark for national interest rates.
Rising inflation due to the Iran war and concerns about a sluggish labor market outside of certain sectors, such as health care, are straining both the Fed’s dual mandate to maintain price stability and maximum employment.
The rate-setting committee, which includes all Fed directors, has remained in wait-and-see mode so far this year, keeping interest rates unchanged at a range of 3.5% to 3.75%. The committee is scheduled to hold its next two-day meeting in mid-June, which could be Mr. Warsh’s first meeting as chairman.
Contact Rachel Barber at rbarber@usatoday.com and follow her at X @rachelbarber_.
