warsh

WASHINGTON — The Senate Banking Committee voted on party lines Wednesday to approve Kevin Warsh as the next chair of the Federal Reserve to replace Jerome Powell, a longtime target of President Trump’s insults for not cutting borrowing costs as far as the president wanted.

The vote was 13-11, with all Republican senators voting in favor and Democrats opposed.

Warsh is a former top Fed official but has also been a sharp critic of the institution and Powell’s leadership. He has called the inflation spike to 9.1% in 2022 the central bank’s biggest policy mistake in four decades. A vote on his nomination probably won’t take place until next month, but he could be confirmed by the time Powell’s term as chair ends May 15.

The Senate Banking vote is the first of two key events surrounding the future of the Fed’s leadership. Also Wednesday, Powell is presiding over what will probably be his last meeting of the Fed’s interest rate-setting committee. At a news conference Wednesday afternoon, Powell may indicate whether he will remain as a member of the central bank’s board of governors after his term as chair ends.

It would be unusual for Powell to stay, but doing so would deprive the Trump administration of an opportunity to appoint a new member to the board. Powell may choose to stay if he sees it as necessary to protect the Fed’s independence, which has become part of his legacy as its leader.

Sen. Tim Scott, a South Carolina Republican and chair of the committee, said Warsh is “battle tested” and added that, “It is incredibly important that we break the bind of Bidenomics on households across this nation.”

Sen. Elizabeth Warren, a Democrat from Massachusetts, criticized the banking panel for voting on Warsh’s nomination. Doing so “will bring the president one step closer to completing his illegal attempt to seize control of the Fed and artificially juice the economy,” she said, citing Trump’s effort to fire Fed governor Lisa Cook and investigate Powell.

The Fed on Wednesday is widely expected to leave its key rate unchanged at about 3.6% for its third straight meeting, defying Trump’s calls for lower rates.

Warsh has called for “regime change” at the Fed and could alter many of its practices, including the economics models it focuses on, how it communicates with the public, and how large its bondholdings will be in the long run.

Those changes could affect financial markets, but otherwise won’t necessarily be visible to the general public. But Warsh has also advocated for additional interest rate cuts, which could potentially lower borrowing costs for mortgages, auto loans, and business loans. He will face barriers to implementing those cuts anytime soon, however, largely because the Iran war has caused a spike in gas prices, pushing inflation to a two-year high of 3.3%.

The Fed typically keeps rates elevated, or even raises them, to combat worsening inflation.

Most of the other 11 members of the Fed’s rate-setting committee have indicated they would prefer to wait and evaluate where inflation and the economy are headed before making any changes to rates. It could take time for Warsh to build up enough influence to push for rapid rate cuts. He will also replace Stephen Miran, a member of the Fed’s rate-setting committee who was appointed by Trump last September and is the most consistent advocate for rate reductions at the central bank.

Warsh also faces questions about his independence from the White House, a key issue that dogged him during a Senate Banking hearing last week. On Wednesday, Warren said, “Mr. Warsh is a Trump sock puppet who is so cowed by the president that he could not even say that Trump lost the 2020 election.”

Last December, Trump called for much lower interest rates in a social media post, and added that “anyone who does not agree with me will never be Fed chair!” And just last week he told Fox Business that he expects rates to head lower, “when Kevin gets in.”

Warsh denied at his hearing, however, that Trump had ever pressured him directly to cut rates.

Rugaber writes for the Associated Press.

WASHINGTON — The Justice Department has ended its probe into Federal Reserve chair Jerome Powell, clearing a major roadblock to the confirmation of his successor, Kevin Warsh.

U.S. Attorney for the District of Columbia Jeannine Pirro said on X that her office was ending its probe into the Fed’s extensive building renovations because the Fed’s Inspector General would scrutinize them instead.

The decision ends an investigation, one of several undertaken by the Justice Department into President Trump’s perceived adversaries, that for months had failed to gain traction as prosecutors struggled to articulate a basis to suspect criminal conduct.

A prosecutor handling the case conceded at a closed-door court hearing in March that the government hadn’t yet found any evidence of a crime, and a judge subsequently quashed subpoenas issued to the Federal Reserve. The judge, James Boasberg, said prosecutors had produced “essentially zero evidence” to suspect Powell of a crime. Boasberg prosecutors’ justification for the subpoenas as “thin and unsubstantiated.”

More recently, prosecutors made an unannounced visit to a construction site at the Fed’s headquarters but were turned away, drawing a rebuke from a defense attorney in the case who called the maneuver “not appropriate.”

The move could lead to a swift confirmation vote by the Senate for Warsh, a former top Fed official whom Trump, a Republican, nominated in January to replace Powell, whose term as chair ends May 15. Sen. Thom Tillis, a North Carolina Republican, has said he would oppose Warsh until the investigation was resolved, effectively blocking his confirmation.

Warsh said Tuesday that he never promised the White House that he would cut interest rates, even as the president renewed his calls for the central bank to do so.

“The president never once asked me to commit to any particular interest rate decision, period,” Kevin Warsh, a former top Fed official, said under questioning by the Senate Banking Committee. “Nor would I ever agree to do so if he had. … I will be an independent actor if confirmed as chair of the Federal Reserve.”

Warsh’s comments came just hours after Trump, in an interview on CNBC, was asked if he would be disappointed if Warsh didn’t immediately cut rates and responded, “I would.”

Kevin Warsh, the man nominated to lead the Federal Reserve, the world’s most important financial institution, told the US Senate Banking Committee on Tuesday that he had made no secret agreements with the White House over interest rate policy, defending his professional integrity.

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He said he would act independently if confirmed to succeed Jerome Powell, despite continued public pressure from US President Donald Trump for lower borrowing costs.

The question of that independence was put sharply to him during the hearing, when Republican Senator John Kennedy asked whether he would be Trump’s “human sock puppet”. Warsh replied: “Absolutely not.”

His comments came amid broader concerns on Capitol Hill about the future direction of the central bank, with lawmakers divided over his past record and approach to monetary policy.

Warsh insisted that the President had never asked him to commit to any specific interest rate path and said he would not have agreed to such a request.

The hearing highlighted the significant pressure facing the Federal Reserve as it maintains its independence while addressing inflation, which remains at 3.3%.

Just hours before the session began, US President Donald Trump stated in a CNBC interview that he would be disappointed if Warsh did not immediately implement rate cuts.

This current friction suggests that the White House may struggle to secure the necessary votes to confirm Warsh before Powell’s term as Fed Chair expires on 15 May.

Democratic opposition and Republican dissent

Democratic senators were particularly vocal in their scepticism, accusing Warsh of shifting his economic stance to suit the political climate.

US Senator Elizabeth Warren labelled the nominee a “sock puppet”, suggesting his installation would facilitate an “illegal takeover” of the institution.

Critics also pointed to his historical record, alleging that he favoured higher rates during Democratic administrations but has become more dovish under Republican leadership.

US Senator Ruben Gallego cited reporting from the Wall Street Journal (WSJ), which claimed the President had previously urged Warsh to reduce borrowing costs. Warsh responded by stating that such reports were based on inaccurate sources and reiterated that the independence of the Fed is “essential” for economic stability.

Despite Trump’s backing, the nomination also faces a critical roadblock within the Republican Party.

US Senator Thom Tillis, a Republican from North Carolina, reiterated his refusal to support Warsh as long as a Department of Justice investigation into Jerome Powell continues.

The probe, led by Assistant US Attorney Jeannine Pirro, is examining whether Powell committed perjury during testimony last year regarding the budget of a Federal Reserve building renovation project.

Tillis and other Republican colleagues have expressed their support for Powell, arguing that the investigation is meritless. According to Tillis, he will not vote for a successor until the “investigation is dropped,” a stance that effectively freezes the nomination in a closely divided committee.

Federal prosecutors have reportedly continued their efforts to access Fed records as recently as last week, even after a judge previously found no evidence to support the charges.

Legal and ethical hurdles

The proceedings also delved into Warsh’s personal financial interests and the logistical challenges of a potential leadership transition.

US Senator Elizabeth Warren raised questions about the nominee’s investments in private entities, including SpaceX and Polymarket, noting that the specific size of these holdings had not been fully disclosed to the public.

Warsh defended his position by stating that the Office of Government Ethics has already approved his plan to divest all assets within 90 days of his confirmation.

Compounding the uncertainty is the unique situation involving Jerome Powell.

Unlike most departing Chairs, Powell has indicated he intends to remain on the Federal Reserve’s governing board until his separate term ends in 2028, or until the perjury investigation is concluded.

This could create an awkward power dynamic where the former Chair sits alongside his successor, a scenario not seen in Washington since the late 1940s.

While US President Donald Trump has threatened to remove Powell from the board entirely, legal experts suggest such a move would be difficult, particularly given recent US Supreme Court precedents relating to the protection of Fed governors from political dismissal.

WASHINGTON — President Trump’s nominee to chair the Federal Reserve said Tuesday that he never promised the White House that he would cut interest rates, even as the president renewed his calls for the central bank to do so.

“The president never once asked me to commit to any particular interest rate decision, period,” Kevin Warsh, a former top Fed official, said under questioning by the Senate Banking Committee. “Nor would I ever agree to do so if he had. … I will be an independent actor if confirmed as chair of the Federal Reserve.”

Warsh’s comments came just hours after Trump, in an interview on CNBC, was asked if he would be disappointed if Warsh didn’t immediately cut rates and responded, “I would.”

The comments underscore the challenge faced by Warsh, 56, a financier and former member of the Fed’s board of governors whom Trump named in January to replace the current Fed chair, Jerome H. Powell. Democrats on the committee accused Warsh of flip-flopping on interest rates over the years, supporting higher interest rates under Democratic presidents and advocating rate cuts during Trump’s time in office. Investors are watching the hearing closely to see how Warsh balances Trump’s demands with worsening inflation, as the war in Iran pushes up the price of gasoline.

Higher inflation typically leads the Fed to raise rates, or at least keep them unchanged, rather than cut them. When the Fed changes its key rate, it can affect mortgages, auto loans and business borrowing.

Yet Warsh’s account was challenged by Sen. Ruben Gallego, an Arizona Democrat, who said that Wall Street Journal reporting last year found that Trump had urged Warsh to reduce borrowing costs.

“Who’s lying here? Is it you or the president?” Gallego asked.

“I think those reporters need better sources,” Warsh responded.

For all the back and forth, the hearing didn’t appear to advance Warsh’s nomination, which has been delayed by a Justice Department investigation into the Fed and Powell, over brief testimony Powell gave last June before the same panel about a building renovation.

Sen. Thom Tillis, a North Carolina Republican on the committee, reiterated Tuesday he wouldn’t vote for Warsh until the investigation is dropped. With the committee closely divided and all Democrats opposed to his nomination, Tillis’ opposition is enough to bottle it up in committee.

“We have got to get rid of this investigation,” Tillis said, “so I can support your nomination.”

Tillis has previously said that all seven Republicans on the committee have signed a letter stating that Powell did not commit a crime when he testified before the panel last June. Federal prosecutors, led by U.S. Atty. Jeanine Pirro, are investigating his testimony for potential perjury, though a judge said last month they offered no evidence to support the charge when he threw out subpoenas Pirro had issued.

Prosecutors from her office as recently as last week sought access to the Fed’s building project but were turned away, revealing that the Trump administration has not reversed course despite opposition from members of his own party that are essential to Warsh’s confirmation.

In his opening remarks, Warsh told the Senate Banking Committee that one of his top goals would be to fight inflation, which remains elevated at 3.3% annually.

“Congress tasked the Fed with the mission to ensure price stability, without excuse or equivocation, argument or anguish,” Warsh said. “Inflation is a choice, and the Fed must take responsibility for it.”

Warsh would be in a tough spot if confirmed. Inflation is worsening, making it much harder for the Fed to implement the interest rate cuts Trump so desperately seeks. The conflict could also slow the economy, as well as hiring. And if Warsh ultimately becomes chair, he may very well find his predecessor, Powell, still sitting on the Fed’s governing board, an uncomfortable arrangement that hasn’t occurred since the late 1940s.

Warsh said the Fed’s political independence is “essential,” and that the central bank wasn’t threatened when “elected officials — presidents, senators, or members of the House — state their views on interest rates.” Trump has repeatedly urged Powell to cut the Fed’s key rate from its current level of about 3.6% to as low as 1%, a view almost no economist shares.

Sen. Elizabeth Warren, a Massachusetts Democrat, said that Trump has not just stated his opinions on rates, but has sought to fire a Fed governor and is investigating Powell.

“The Senate should not be aiding and abetting Donald Trump’s illegal takeover of the Fed by installing his chosen sock puppet as chair,” she said Tuesday.

Warren also noted that Warsh has not disclosed all of his financial holdings, which include investments in startups and private companies, or the size of those financial stakes. For example, Warsh has said he has holdings in SpaceX and Polymarket, but has not said how large those investments are.

Warren charged that Warsh is not in compliance with ethics requirements. Warsh argued that the Office of Government Ethics has signed off on his plan to sell all his assets within 90 days of his confirmation.

The turmoil could make a potential transition from Powell to Warsh an unusually turbulent one for the world’s most pivotal central bank, which has historically experienced smooth transfers of power. Should the change in leadership prove particularly bumpy, it could unnerve markets and lift longer-term interest rates.

Powell’s term as chair ends May 15. He said last month that he would remain as chair until a successor is named. Powell also is serving a separate term as a member of the Fed’s governing board that lasts until January 2028. Fed chairs typically leave the board when their terms as chair end, but Powell said last month he would remain on the board, even if a new chair is approved, until the investigation is dropped.

Trump said he would fire Powell if he attempted to remain at the Fed. Yet Trump’s previous attempt to remove a Fed governor, Lisa Cook, has been tied up in court. During oral arguments in January, a majority of justices on the Supreme Court appeared to lean toward leaving Cook at the Fed.

Rugaber writes for the Associated Press.

Kevin Warsh, United States President Donald Trump’s pick to lead the Federal Reserve, has addressed concerns about his independence pending his appointment to the bank amid fears that Trump could sway his decisions on monetary policy.

On Tuesday, Warsh — who served on the central bank’s Board of Governors from 2006 to 2011 — faced waves of criticism during a confirmation hearing of the Senate Banking Committee where Democrats voiced concerns about the Fed’s independence should he be appointed to lead the organisation.

Senator Elizabeth Warren of Massachusetts, the ranking Democrat on the committee, questioned Warsh’s independence, alleging that he would be a “sock puppet” for Trump, concerns he pushed back against and addressed in his opening testimony.

“I do not believe the operational independence of monetary policy is particularly threatened when elected officials — presidents, senators, or members of the House — state their views on interest rates,” Warsh said.

“Monetary policy independence is essential. Monetary policymakers must act in the nation’s interest . . . their decisions the product of analytic rigour, meaningful deliberation, and unclouded decision-making.”

Warsh, 56, also called for “regime change” at the US central bank, including a new approach for controlling inflation and a communications overhaul that may discourage his colleagues from saying too much about the direction of monetary policy.

Warsh blamed the central bank for an inflation surge after it slashed interest rates to nearly zero in the wake of the COVID-19 pandemic, a move that continues to hurt US households.

Concerned by the implications of artificial intelligence for jobs – expected to increase productivity – and prices, he said he would move quickly to see if new data tools could provide better insight on inflation, and would also discourage policymakers from saying too much about where interest rates might be heading.

“What the Fed needs are reforms to its frameworks and reforms to its communications,” the former Fed governor said. “Too many Fed officials opine about where interest rates should be … That is quite unhelpful.”

Warsh has also long been an advocate for shrinking the Fed’s $6.7 trillion balance sheet. In the Tuesday hearing, he said any such plans would take time and must be publicly discussed well in advance.

Jai Kedia, a research fellow at the Center for Monetary and Financial Alternatives at the libertarian Cato Institute, told Al Jazeera that there were many “encouraging” signs in Warsh’s candidacy.

“Warsh is presenting himself as a regime change candidate at a time when the Fed needs serious reform,” Kedia noted. “Particularly encouraging was his understanding of the negative effects of QE and his focus on reducing the balance sheet. He also correctly criticised mission creep and acknowledged that the Fed did better when it kept its focus on the dual mandate [of keeping inflation at 2 percent and increasing employment].”

Quantitative easing or QE is an unconventional monetary policy under which a central bank lowers interest rates, among other measures, to boost the economy, a step taken by central banks in several developed countries during the pandemic.

Warsh’s private investments, at well over $100m, are also under scrutiny. Among them are two holdings in the Juggernaut Fund LP, apparently part of his work advising for the Duquesne Family Office, the private investment firm of Stanley Druckenmiller.

Warsh’s nearly 70-page financial disclosure also showed that his other holdings include investments in Elon Musk’s SpaceX and the prediction trading platform Polymarket.

“I agreed to divest virtually all of my financial assets, the large majority of which will be divested” before taking office, Warsh said without giving any details.

Warsh noted that selling his holdings comes with challenges. He said that when that process is completed, he would have “virtually no financial assets” and “we’ll be sitting in something like cash”.

Warren, however, questioned him about the divestment plan. “Do we have any way to verify that, in fact, these sales will occur if we have no idea what’s in them?” she asked.

Political hurdles

The hearing quickly turned contentious, and the pace of Warsh’s confirmation process through the Senate remained in doubt.

He would not directly say that Trump lost the 2020 election – a statement of fact that Senator Warren said was a litmus test of Warsh’s independence from the Republican president who nominated him for the top Fed job.

Yet even amidst the focus on independence, Warsh needs 13 votes to clear the 24-member Senate Banking Committee.

North Carolina Senator Thom Tillis said he would vote against Trump’s nominee and join Democrats, which would create a 12–12 split. The committee has 13 Republican members and 11 Democrats.

Tillis said he would not vote for any Trump nominee until an investigation into current Fed Governor Jerome Powell, whose term ends May 15, is either concluded or called off. Last month, federal prosecutors said they found no evidence of wrongdoing. But Jeanine Pirro, the US Attorney for the District of Columbia, has not indicated that the investigation will be dropped.

Tillis said on Tuesday that he would support Warsh’s nomination once the probe into Powell is dropped.

“Today’s confirmation hearing underscored that Warsh is aiming for independence with guardrails,” noted Selma Hepp, chief Economist of Cotality, a market analytics company. “He rejected being a political ‘sock puppet’ and argued the Fed protects its autonomy by ‘staying in its lane.’ He offered no pre-commitment on rates, while emphasising inflation discipline, a large balance sheet, and a desire for clearer Fed communication.”

Noel Dixon, senior macro strategist at State Street, said that with Warsh, the US would have a “dovish-leaning Fed”.

“When a senator asked him if he would lower rates to 1 percent – I guess Trump had indicated that he would like to have rates below 2 percent – Warsh didn’t really say no to that,” Dixon noted. “He didn’t say that it would increase prices. He kind of leaned on it and said there would be a lagged effect, and he was just very noncommittal to that. So it’s almost like – just reading between the lines – he’s giving himself space to maintain possible justification for rate cuts by the end of the year.”

Trump has continued to pressure the central bank.

On Tuesday, he said he would be “disappointed” if the Fed did not lower interest rates.

Tuesday’s remarks follow comments in December, when the US president said he would not appoint anyone to lead the central bank unless they agreed with him.

“The public needs to know whether Mr. Warsh will have the courage of his convictions or if he’s willing to compromise his independence and accommodate more Wall Street deregulation,” Graham Steele, an academic fellow at the Rock Center for Corporate Governance at Stanford University, told Al Jazeera in an email.

Warsh has praised the administration for its push for increased bank deregulation. In a November 2025 op-ed for the Wall Street Journal, Warsh claimed that Trump’s “deregulatory agenda” is “the most significant since President Ronald Reagan’s”.

April 14 (UPI) — Kevin Warsh, the presidential pick for the next Federal Reserve chairman, has wealth greater than any other recent chairman, his financial disclosures released Tuesday show.

The filings were part of the usual consideration process for the role. Warsh, if confirmed, would succeed current Chairman Jerome Powell, whose second term ends May 15. A Senate hearing on the matter is expected to take place April 21.

CNBC reported that Warsh’s disclosure forms show that the nominee has about $192 million in assets in combination with his wife, Jane Lauder, who is an heir to the Estee Lauder fortune. Warsh’s solo assets equal about $135 million to $226 million. These numbers show a large range because they can include variable items such as bonds, stocks and other assets.

By comparison, Powell’s financial filings for 2025 showed assets of between $19 million and $75 million, while former Chairman Ben Bernanke, who left office in 2014, submitted filings that year of about $2.3 million in assets, CNBC reported.

If the Senate confirms Warsh, he has said that he will divest a large amount of assets, of which about 1,800 were listed in the forms. Some of these were undisclosed because of cited “preexisting confidentiality agreements,” The New York Times and CNBC reported.

Warsh, who served as a governor at the Federal Reserve from 2006 to 2011, also said that he would resign posts such as his role as financial adviser to investor Stanley Druckenmiller, as well as several other positions including a board seat at UPS.

Warsh will face the Senate Banking Committee in the planned hearing before a full Senate vote. However, an ongoing Department of Justice investigation into Powell has further complicated matters. Sen. Thom Tillis, R-N.C., a member of the Senate Banking Committee, has said he will not vote on Warsh or any other nominee for the role until the investigation is completed.