Kevin Warsh vows Fed independence at Senate confirmation hearing
Kevin Warsh told lawmakers Tuesday that he would be “an independent actor” if confirmed as Federal Reserve chairman, pushing back against suggestions that he would defer to President Donald Trump on interest rate decisions.
At the center of the Senate Banking Committee hearing’s most contentious moments was Sen. Elizabeth Warren, Democrat of Massachusetts, who is the committee’s senior minority member. She accused Warsh of being Trump’s “puppet” and questioned whether he could truly operate without influence from the White House. A version of the same challenge came from the Republican side of the aisle, with Louisiana Sen. John Kennedy asking Warsh to deny that he would function as the president’s “human puppet.” Warsh’s response was unequivocal: “Senator, absolutely not. »
Warsh also said Trump never conditioned his nomination on a commitment to cutting rates. “The president has never asked me to commit to any particular interest rate decision, period,” he said.
According to Politico, much of Warren’s review focused on Warsh’s financial filings, which put his total assets at between $130 million and $210 million and included positions in private investment funds, stakes in technology companies such as SpaceX and Polymarket, the market prediction site backed by Elon Musk. Although Warsh committed, as part of a signed agreement, to abandon virtually his entire portfolio before assuming office – with a 90-day deadline after confirmation to do so – he declined to name individual holdings, citing prior confidentiality obligations as the reason for withholding that information. One of Warren’s pointed questions was whether the investment vehicles in Warsh’s portfolio had invested money in companies linked to Trump’s orbit or members of his family, or in financial structures linked to Jeffrey Epstein. Warsh did not respond directly.
“It’s critical that the next president has no financial conflicts, none,” Warren said.
Warsh’s prepared remarks present independence as a value that the Fed itself must uphold rather than one that depends on political restraint from the outside. He drew a distinction between presidents or lawmakers expressing rate preferences — which he said poses no particular threat to central bank autonomy — and the Fed venturing into political territory beyond its core mandate, which he said it should avoid.
On policy direction, Warsh told the committee that he envisions a fundamental restructuring of how the Fed operates — including a revised approach to inflation targeting — and focused on the quarterly forecasting process in which officials anonymously project future rate levels, suggesting that this represents a form of overcommunication that he would reconsider. He left open the question of how many times a year the Fed’s governing body should meet, saying only that four meetings would be too few, while refusing to endorse the current practice of holding eight.
The hearing took place against a backdrop of a distinct hurdle to Warsh’s confirmation. Thom Tillis of North Carolina, a Republican whose vote is crucial on the also contested committee, declared his personal support for Warsh while making clear he would refuse to let the nomination move forward unless prosecutors drop their criminal investigation into Powell. A defection by Tillis would leave the 24-member panel evenly split, depriving Warsh of the majority he needs to advance. Powell’s term ends on May 15.
Warsh has previously said he would work to keep the Fed “aware of its limitations, focused on its mission.” His proposed overhaul of the Fed includes shrinking the central bank’s balance sheet by $6.7 trillion, and he told senators that the Fed bears some responsibility for the growing divide between Americans who own assets and those who don’t.
