US Senate confirms Kevin Warsh as Federal Reserve chair, replacing Jerome Powell | Federal Reserve
The U.S. Senate has confirmed Kevin Warsh as chairman of the Federal Reserve, one of the most powerful roles in the federal government that wields enormous influence over the economy.
Wednesday’s Senate vote, 54-45, was split along party lines, with the exception of Democratic Sen. John Fetterman of Pennsylvania, who joined the Republican majority. This is the most controversial confirmation vote for the position in history.
Warsh was confirmed for a four-year term as chairman and a 14-year appointment to the Fed’s rate-setting board.
Warsh will officially take office on May 14, when outgoing Fed Chairman Jerome Powell’s term ends. He takes over as head of the Fed at a time when the central bank faces immense pressure from the Trump administration to cut rates, even as inflation soars and the war in the Middle East continues.
A White House spokesman, Kush Desai, called Warsh’s Senate confirmation “a welcome step toward definitively restoring accountability, competence and confidence in the Fed’s decision-making process.”
The Fed sets interest rates, which determine the cost of borrowing. Higher interest rates generally dampen spending and prices, risking higher unemployment. Lower interest rates can stimulate the economy but also raise prices.
Warsh has echoed Donald Trump’s calls for a rate cut, but must convince other members of the 12-voting Fed board to do so. With inflation reaching 3.8%, this could be difficult to defend.
Before Warsh, the most controversial Fed chair confirmation came in 2010, when Ben Bernanke was confirmed by a vote of 70 to 30.
Speaking on the Senate floor Wednesday, Senate Majority Leader John Thune ridiculed Democrats for their opposition to Warsh’s nomination. “I wish I could say I’m surprised, but that’s how much Trump derangement syndrome has spread across the aisle,” he said.
Elizabeth Warren, the ranking Democratic member of the Senate Banking Committee, said Trump appointed Warsh to be his “sock puppet” to help him control interest rates.
“Warsh’s confirmation = another step in Trump’s attempt to take control of the Fed,” she wrote on X. “It’s not good for working families, it’s good for Wall Street.”
Fetterman, the only Democrat to vote for Warsh, said in a statement that he believed Warsh would be “transparent and responsive to Congress and the public.”
“His promise to maintain the Fed’s independence in setting interest rates is crucial, and I look forward to working with him,” he said, adding that he praised Powell’s tenure as head of the Fed and encouraged him to stay on the Fed board for as long as he wanted.
An Ivy League economist and former Wall Street banker, Warsh served as governor of the Fed from 2006 to 2011. During his tenure on the board, he was known as an “inflation hawk” – advocating for higher interest rates to combat high inflation. He left the Fed board in 2011, in part over disagreements over the Fed’s post-financial crisis stimulus plan.
Warsh was reportedly interviewed for the Fed top job in 2018, but Trump ultimately nominated Powell — a decision the president now calls a “very big mistake.”
At a hearing before the Senate Banking Committee last month, Warsh said he would maintain the independence of the Fed and “take politics out of monetary policy and monetary policy out of politics.” But he refused to say whether Trump lost the 2020 election, alarming Democrats who say Warsh would be Trump’s “sock puppet.”
Although outgoing Fed leaders typically leave after their term as chairman ends, Powell announced last month that he would remain on the Fed board as a voting governor until the White House completes its review of renovations to the central bank’s headquarters that ran over budget. Powell called the review a “pretext” for wanting to pressure the central bank into lowering rates.
