Senate Confirms Kevin Warsh to Lead the Federal Reserve

The Senate confirmed Kevin Warsh as chair of the Federal Reserve on Wednesday, handing President Trump his choice to succeed Jerome Powell as inflation climbs. The vote was 54-45, with Sen. John Fetterman of Pennsylvania joining Republicans, according to CBS News. The Associated Press, via PBS NewsHour, described the vote as largely along party lines. The Senate had confirmed Warsh a day earlier to a seat on the Board of Governors, CBS reported; that seat runs to 2040.

Warsh served as a Fed governor from 2006 to 2011 and was later a fellow at the Hoover Institution. CBS said his four-year term as chair begins Friday. He will take the board seat held by Stephen Miran, who has dissented in favor of rate cuts at every meeting since Trump appointed him in September, the AP reported. NBC News reported that Warsh is expected to chair the Fed’s June 16-17 meeting.

The road to confirmation ran through a Republican. Sen. Thom Tillis of North Carolina refused to advance any Fed nominee from the Banking Committee until the Justice Department dropped its criminal investigation of Powell over the Fed’s headquarters renovation, calling the probe “bogus,” CBS reported. Prosecutors dropped it in April. U.S. Attorney Jeanine Pirro has said it could restart if the Fed’s inspector general finds wrongdoing, according to both CBS and the AP. CBS also reported that a judge quashed grand jury subpoenas in the matter, finding their purpose was to “harass” Powell.

Powell said he will remain on the board as a governor, “for a period of time to be determined,” and keep a low profile, CBS reported. The AP said his governor term runs to January 2028.

The central question is rates. The Fed has held its benchmark rate steady for three straight meetings, CBS and the AP both reported, and NBC News put the target range at 3.5 percent to 3.75 percent. Consumer prices rose 3.8 percent in April from a year earlier, the Labor Department reported Tuesday, driven by gasoline prices tied to the war with Iran. At the Fed’s last meeting, three members objected to language implying the next move would be a cut, preferring wording that would allow for a hike, the AP reported. CME FedWatch data show markets put the odds of a cut this year below 50 percent, according to CBS.

Trump has pushed publicly for lower rates and said in December that he wanted a chair who would cut when the stock market rose. National Economic Council Director Kevin Hassett said markets are relieved Warsh will help lower rates over time and that he is not pressuring him, the AP reported. At his April confirmation hearing, Warsh said “the president never once asked me to commit to any particular interest rate decision, period.”

Warsh has called for “regime change” at the Fed, criticizing its response to post-pandemic inflation, its bank regulation and the size of its balance sheet, CBS reported. He has also proposed limiting the Fed’s communications, the AP reported. Sen. Elizabeth Warren, a Massachusetts Democrat, called him a “sock puppet” for Trump at the hearing and criticized his disclosures, which show at least $100 million in assets, the AP reported. Warsh has promised to sell certain holdings within 90 days of being sworn in.

Treasury Secretary Scott Bessent said he would understand if the Fed waits for more clarity before cutting, CBS reported.