WASHINGTON — President Trump on Friday oversaw the White House swearing-in of the new Federal Reserve chair and said he would like Kevin Warsh’s help in stimulating the economy even as he tried to emphasize that the nation’s central bank would remain independent.
Trump spent months criticizing Warsh’s predecessor, Jerome Powell, for being reluctant to cut interests rates, with the Republican president arguing that lower borrowing costs would provide an economic boost. By taking the unusual step of holding the ceremony in the East Room and not the Fed, Trump made clear his pleasure that Warsh is now in charge.
The war with Iran has caused gas prices to spike, unsettled financial markets and driven inflation concerns across the economy. Those developments have led to recent doubts about whether Warsh might heed Trump’s calls and push the Fed to lower rates.
Still, Trump said he had faith that Warsh would prioritize a strong economy.
“Thankfully, unlike some of his predecessors, Kevin understands that when the economy is booming, it is, that’s a good thing,” the president said. Trump said it was not necessary “to go crazy. Just let it go. We want it to boom.”
Supreme Court Justice Clarence Thomas administered the oath of office. Also on hand were House Speaker Mike Johnson (R-La.), Justice Brett Kavanaugh, CIA Director John Ratcliffe and Cabinet members.
“I expect he will go down as one of the truly great chairmen of the Federal Reserve that we’ve ever had,” Trump said of Warsh.
Republican President Reagan swore in Alan Greenspan as Fed chair at the White House in 1987. Republican President George W. Bush attended the 2006 ceremony at central bank headquarters when Ben Bernanke became chair.
But having the event at the White House raises more questions about the Fed’s independence at a time when Trump has constantly sought to bend the independent central bank to his will.
Trump’s Department of Justice began an investigation into Powell and the Fed’s extensive building renovations. That drew backlash from lawmakers and the department scrapped the investigation. The Fed’s internal watchdog is now handling the matter. Powell’s term as chair ended last week, though he has opted to remain on the Fed board for now.
Trump made a point of saying during his remarks, “Honestly, I really mean this. This is not said in any other way: I want Kevin to be totally independent.”
“I want him to be independent and just do a great job,” Trump said. “Don’t look at me, don’t look at anybody. Just do your own thing.”
In the next breath, however, Trump said that “in the eyes of many, the Fed has lost its way in recent years” under his predecessor, Democratic President Biden. Trump also suggested that Warsh is looking to lead policies that promote “positive economic growth” and that doing so did not have to mean higher inflation.
Trump also noted that the stock market had risen Friday. “That means they like you,” he said of Warsh.
Warsh once harshly criticized Fed’s policies, including its low interest rate policies coming out of the pandemic, which he says contributed to the largest U.S. inflation spike in four decades in 2021-22. More recently, he has sometimes echoed Trump’s demands for lower rates.
Warsh says productivity gains from artificial intelligence will help the economy grow more quickly without spurring inflation, enabling the Fed to reduce borrowing costs. Many Fed officials, however, disagree that AI’s development will support rate cuts, especially because the technology has also been blamed for large-scale layoffs in the computer sector and other parts of the economy.
On Friday, Warsh promised “to lead a reform oriented Federal Reserve, learning from past successes and mistakes, both escaping static frameworks and models and upholding clear standards of integrity and performance.”
He told Trump that he believes “these years can bring unmatched prosperity that will raise living standards for Americans from all walks of life. And the Fed has something to do with it.”
Warsh further noted that the Fed’s mandate “is to promote price stability and maximum employment. When we pursue those aims with wisdom and clarity, independence and resolve, inflation can be lower; growth, stronger; real take home pay, higher and America … more prosperous.”
As he left the ceremony, Treasury Secretary Scott Bessent reinforced Trump’s message, predicting to reporters that Warsh will “do the right thing for inflation and growth.”
Weissert and Price write for the Associated Press.
Warsh will lead the central bank at a time when its independence has come under scrutiny amid political pressure.
Published On 22 May 202622 May 2026
Kevin Warsh has been sworn in as the new chair of the United States Federal Reserve Board of Governors, succeeding Jerome Powell, who has held the position since 2018.
Warsh took the oath of office on Friday, following a contentious nomination period, with the Senate voting along party lines on both his confirmation to the Board of Governors and as chairman. Only Pennsylvania Senator John Fetterman broke with his Democratic colleagues to advance his nomination.
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Warsh, 56, will lead the central bank at a time when its independence has come under scrutiny amid political pressure on the historically non-partisan institution.
US President Donald Trump, aware of that critique, in his opening remarks said, “I want Kevin to be totally independent and do a great job. Don’t look at me and don’t look at anybody. Just do your own job”.
During his confirmation hearing before the Senate Banking Committee, ahead of a vote by the full Senate, Democratic Senator Elizabeth Warren accused Warsh of being a “sock puppet” for Trump. Warsh denied the allegations and said he would remain independent in his monetary policy decisions.
When Joe Biden was president, Warsh advocated against cutting interest rates, but changed his tune when Trump took office. In December 2025, Trump said that he would only appoint someone to lead the central bank who agreed with him on cutting rates.
Regardless, Warsh cannot unilaterally make policy decisions. He is one of 12 voting members.
The first policy meeting Warsh will lead will be on June 16-17.
Pressure from the White House to cut rates comes amid rising inflation in the US economy.
Consumer prices increased 0.6 percent in April after a 0.9 percent rise in March, according to the most recent Consumer Price Index report released by the Labor Department’s Bureau of Labor Statistics earlier this month.
On an annual basis, prices were also higher, rising 3.8 percent compared with the same month in 2025, marking the largest increase in three years. The largest surge has been in energy prices, which have risen 17.9 percent over the last year.
US consumers are feeling the strain at the pump. The average price for a gallon of petrol (3.78 litres) is $4.56, according to the American Automobile Association (AAA), which tracks daily petrol prices. That is up from $2.98 per gallon on February 28, when the US and Israel first struck Iran.
After he was sworn in, Warsh said he was “not naive” about the challenges facing the US economy, and that inflation can be lower and growth strong.
Surging prices could put pressure on the central bank not to cut rates. Analysts from JPMorgan Chase forecasted last month that rates will likely remain unchanged until mid-2027 and anticipated then that rates could rise rather than be cut.
“With inflation having run significantly above 2 percent over the past five years, with further increases in inflation likely to occur as a result of the conflict in the Middle East, and with emergent price pressures in a few categories that appeared unrelated to tariffs or energy prices, the staff viewed the possibility that inflation would be more persistent than anticipated as a salient risk,” the central bank said in the newly released minutes of its April policy meeting.
CME Group’s FedWatch tool, which tracks the likelihood of monetary policy decisions, says there is a 97 percent chance that rates will remain unchanged at the next policy meeting.
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Long-term US borrowing costs climbed to levels not seen since before the global financial crisis after the Treasury auctioned $25bn (€21.3bn) in 30-year bonds at a high yield of 5.058% on Wednesday, according to the department’s own data.
The sale came only hours after the US Senate voted to confirm former Federal Reserve governor Kevin Warsh as the next chairman, succeeding Jerome Powell.
The auction result immediately complicated the backdrop for Warsh’s arrival at the central bank, underlining the pressure facing policymakers as inflation is rising.
At the time of writing on Thursday, US 30-year bonds are trading at 5.02% while 10-year notes are selling with a yield of 4.44%.
US inflation figures released earlier this week showed consumer prices rose 3.8% from April 2025 as the 10-week Iran war pushed energy costs higher and distanced inflation from the Federal Reserve’s 2% target.
Producer price data also pointed to persistent underlying cost pressures across the economy, reinforcing expectations that the central bank may struggle to ease monetary policy quickly.
Rising Treasury yields have broad implications for the economy because they influence borrowing costs on mortgages, corporate debt and other forms of credit.
Higher long-term yields can also increase financing costs for the US government at a time when public debt is nearing $40 trillion (€34.1tn).
Investors are increasingly concerned that a combination of resilient economic growth, elevated energy prices and sustained government borrowing could keep inflationary pressures alive despite two years of restrictive monetary policy.
The yield on the benchmark 30-year Treasury bond being auctioned above 5% is a symbolic threshold last reached in 2007 before the onset of the global financial crisis.
While market conditions today differ substantially from that period, the move nonetheless underscores the sharp repricing that has taken place in global bond markets over the past two years.
Kevin Warsh takes over the Federal Reserve at a delicate moment for the US economy.
The former Morgan Stanley banker and Fed governor has previously argued in favour of maintaining the central bank’s credibility on inflation, while also signalling support for reforms to the institution’s communication strategy and balance sheet policies.
Warsh’s confirmation comes as financial markets remain divided over how aggressively the Federal Reserve should respond to persistent inflation pressures.
Some investors believe rates may need to stay higher for an extended period, while others warn that maintaining tight monetary conditions for too long could weigh heavily on economic growth and employment.
The main driver of the rise in inflation is the current disruption to global energy markets caused by the Iran war which also leaves the central bank at the mercy of geopolitics and not able to effectively control the situation.
Analysts stated that Wednesday’s Treasury auction illustrated the immediate challenge confronting the incoming Fed chair.
Elevated bond yields can help tighten financial conditions without additional rate increases from the central bank, but they can also amplify risks for heavily indebted households, businesses and the federal government itself.
For Warsh, the market reaction served as an early reminder that restoring confidence on inflation may prove more complicated than simply holding interest rates at restrictive levels.
WASHINGTON — The Senate confirmed President Trump’s nominee to lead the Federal Reserve, Kevin Warsh, bringing new leadership to the world’s most powerful central bank at a fraught moment for the global economy.
Warsh was confirmed Wednesday in a largely party-line vote. His nomination had been thrown into doubt in recent months after Republican Sen. Thom Tillis of North Carolina said he would block the nomination while the Justice Department investigated Fed Chair Jerome H. Powell. The Powell inquiry was dropped in April, clearing the way for the Senate to confirm Warsh.
Senate Majority Leader John Thune (R-S.D.) urged colleagues to support Warsh during a floor speech Wednesday morning, saying it’s crucial 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.”
“Kevin Warsh is just such a person,” Thune said.
Warsh, 56, a former top Fed official, will become chair at an unusually difficult time for the independent agency.
Inflation has topped the Fed’s 2% target for five years and is now rising faster because of surging gas prices. The Fed’s interest rate-setting committee is divided and saw the most dissenting votes in more than three decades last month. And Powell, after years of personal attacks from the Republican president and an unprecedented legal investigation by the Justice Department, plans to stay on the Fed’s board even after his term as chair ends, potentially creating a competing power center.
The Fed has faced numerous threats to its independence from Trump, who has repeatedly attacked Powell for not cutting interest rates. Trump also sought to fire Fed Gov. Lisa Cook and launched an investigation into brief Senate testimony by Powell on a building renovation.
Kevin Hassett, director of the White House’s National Economic Council, said in a Fox News interview on Sunday that he believes the markets are relieved that Warsh “is going to help lower interest rates over time.”
“Obviously, data driven,” said Hassett. “I’m not putting any pressure on Kevin Warsh.”
In December, Trump said on his social media platform that he wanted a Fed chair who would cut interest rates when the stock market rose — the opposite of what traditional economics would prescribe — and added, “Anyone that disagrees with me will never be the Fed chairman!”
Trump’s comments have fueled concerns over whether Warsh will set rates based on economic conditions or seek to cut rates to appease Trump, even if doing so could worsen inflation. At Warsh’s confirmation hearing last month, Sen. Elizabeth Warren, a Democrat from Massachusetts, derided him as a “sock puppet” for Trump. Warsh declined to say that Democrat Joe Biden had won the 2020 election against Trump, who has falsely claimed that voter fraud cost him reelection.
Still, Warsh denied at the hearing that Trump had pressured him to reduce the Fed’s key rate.
“The president never once asked me to commit to any particular interest rate decision, period,” Warsh said then. “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 has been highly critical of the Fed’s recent track record, particularly the inflation spike in 2021-22, the worst in four decades, and has called for “regime change.” Yet he has provided only broad outlines of what that change would involve.
He has called for limiting the Fed’s communications, which would be a sharp shift after decades of increasing transparency. He has argued that some of its communications tools, such as quarterly forecasts of where its key rate may head, have made it harder for officials to switch gears.
Senate Democrats also have condemned Warsh for not fully divulging the details of his extensive wealth, which disclosures show amounts to at least $100 million. His investments include stakes in Polymarket and SpaceX, but he hasn’t revealed how large those holdings are. He promised to sell all such assets within 90 days of being sworn in.
“He will be the wealthiest Fed chair in history, but he refuses to provide transparency to the American people about who he is entangled with,” Warren said.
The Fed is still grappling with how to respond to the 50% jump in gas prices from the Iran war. The increase has boosted inflation, which reached 3.8% in April.
The Fed is tasked by Congress with keeping prices stable, which it seeks to do by raising its short-term rate to make borrowing and spending more expensive, cooling growth and inflation.
The Fed typically looks past temporary price increases that stem from supply disruptions, such as the war’s cutoff of oil through the Strait of Hormuz, because those prices typically level off — or even fall back down — once the supply is restored.
But the Fed also followed that approach after the COVID-19 pandemic snarled global supply chains for goods, lifting prices for things such as cars, furniture and electronics. Inflation turned out to last longer than expected, and Powell and other Fed officials have acknowledged they waited too long to raise rates. Inflation surged to 9.1% by June 2022.
The Fed’s rate-setting committee has kept rates unchanged for three straight meetings as it evaluates the effect of the gas price spike. At its most recent meeting last month, three members of the committee objected to language that suggested its next move would be a rate cut. They preferred more neutral language that would allow for a hike. Many Fed watchers saw those dissents as a warning shot to Warsh that he won’t be able to easily engineer rate reductions.
A fourth member of the 12-member committee, Stephen Miran, dissented in favor of a rate cut, as he has at every meeting since Trump appointed him to the Fed’s board last September. Miran is serving until a replacement is named, and Warsh will take his spot.
Powell, meanwhile, said at a news conference April 29 that he would remain as a Fed governor until the Justice Department closes its investigation into the Fed’s building project, the first time a chair may stay on the board for an extended period since 1948. His term as a governor lasts until January 2028.
U.S. Atty. Jeanine Pirro has dropped the government’s investigation, but she has said it could be reopened if the Fed’s inspector general office, which has looked into the renovation project since last July, finds evidence of criminal activity.
Rugaber and Cappelletti write for the Associated Press.
May 13 (UPI) — The U.S. Senate voted to confirm Kevin Warsh on Wednesday as the new chairman of the Federal Reserve. Warsh, who was nominated by President Donald Trump, succeeds Jerome Powell, who has been frequently criticized by the president for not lowering interest rates in accordance with Trump’s demands.
The Senate voted 54-45 to confirm Warsh in the most partisan vote for a chair nominee in history, CNN reported. Sen. John Fetterman, D-Pa., was the only Democrat to vote in favor of the confirmation.
Warsh will be the 17th chair of the central bank, which is traditionally politically independent. However, Trump has aimed a great deal of criticism at the Fed and its governors over that independence, insulting Powell harshly at times and threatening to fire him.
The president also supported a Justice Department investigation into Powell, allegedly over costs for the central bank headquarters renovation. Powell has said that Trump targeted him because of the Fed would not follow his orders on interest rates. The Justice Department dropped the investigation in late April.
Democrats have expressed concerns about Warsh’s independence from Trump if confirmed. The new Fed chair has said he will be “an independent actor” but also promised a “regime change” at the central bank, The New York Times reported.
Warsh is the wealthiest Fed chair nominee in recent history, with a net worth over $100 million. He is married to Jane Lauder, who is an heir to the Estee Lauder fortune, and also has about $192 million in assets in combination with her.
Warsh said that he would divest a large amount of his assets and resign from several positions if confirmed. He also served as a governor at the Federal Reserve from 2006 to 2011.
Powell’s term as chair ends Friday, but he has said he’ll stay as a fed governor for his remaining two years.
Andrew Harnik/Getty Images News
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.
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 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.
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.
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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.
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”.