US Senate Confirms Kevin Warsh as Federal Reserve Chair, Replacing Jerome Powell

The US Senate confirmed President Donald Trump’s nominee Kevin Warsh as the next Federal Reserve chair in a 54-45 vote on Wednesday, handing Trump a long-sought victory while Warsh succeeds Jerome Powell.

“Senate confirms Fed chair nominee Kevin Warsh, ending standoff over Powell probe Investigators moved last month to drop a probe into Fed Chair Jerome Powell”

ABC News

The BBC said Warsh will take over as Powell’s term ends on Friday, and it described Warsh’s confirmation as the narrowest margin for Senate approval of a Fed chair since the process was implemented in 1977.

ABC News

The Washington Post said the Senate confirmed Warsh in a 54-45 vote Wednesday, with Sen. John Fetterman of Pennsylvania the only Democrat to support Warsh.

The AP reported that Warsh, 56, will replace Powell as chair at a “fraught moment for the global economy,” and it said Powell plans to remain on the Fed’s board even after his chair term ends.

The BBC added that Warsh is facing a “difficult balancing act” because Trump expects his pick to lower the Fed’s interest rate while inflation is rising, including after April prices rose 3.8% annually.

During Warsh’s confirmation hearing before the Senate Banking Committee, he vowed he will not act as Trump’s “sock puppet” and will fight to defend the central bank’s independence, while the BBC reported that ranking Democrat Sen. Elizabeth Warren warned Warsh is “uniquely ill-suited” for the role.

The BBC also quoted Carl Tobias, Williams Chair in Law at the University of Richmond, saying Warsh faces a “Mission Impossible” because inflation is “roaring” while Trump is “vociferously demanding lower interest rates” and the Fed board is “sharply divided”.

AP News

The AP said Powell called the investigation into alleged false testimony about an office renovation a politically motivated effort to influence interest-rate policy, and it quoted Powell saying, "My concern is really about the series of legal attacks on the Fed, which threaten our ability to conduct monetary policy without considering political factors,".

The AP further reported that Senate Majority Leader John Thune said it’s critical that a Fed chair “understand not only the macro” but also “appreciate the microeconomy: and that’s the hardworking Americans, their jobs and their livelihoods.”

The BBC said Warsh promised at the hearing to defend the Fed’s independence, even as it reported that only one Democrat, John Fetterman, voted in favour of Warsh.

Warsh’s confirmation arrives as inflation is above the Fed’s 2% target, with the BBC citing April prices rising at 3.8% annually and describing energy costs as a driver after the closure of the Strait of Hormuz caused oil prices to spike.

“Trump's Fed chair pick Kevin Warsh confirmed by US Senate Donald Trump's Federal Reserve chair has been confirmed by the US Senate in a vote that fell largely along party lines”

BBC

The AP said the Fed’s interest rate-setting committee is divided and that it saw the most dissenting votes in more than three decades last month, while it reported that Powell could remain on the Fed’s 12-member policymaking board until 2028.

NPR reported that Warsh is hoping to lead the Fed into much lower interest rates, but it said persistent inflation above the 2% target leaves some committee members wary of cutting rates.

NBC News said Warsh’s first meeting as chair is expected to be June 16 to 17, and it reported that financial markets now expect no change to the Fed’s 3.5%-3.75% policy rate target this year, with a rate hike as soon as January.

The Washington Post framed the immediate political stakes by noting that Trump’s allies warned rate cuts may have to wait, even as the Senate confirmed Warsh in a 54-45 vote Wednesday.