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Kevin Warsh set to clear key Senate hurdle to replace Fed chair Powell
TL;DR
Kevin Warsh is poised to clear a key Senate hurdle to replace Jerome Powell as Fed chair. The Senate banking committee will vote on his nomination, with all Republicans expected to support him despite Democratic opposition.
Key points
- Kevin Warsh is Donald Trump's pick to lead the Federal Reserve.
- The Senate banking committee will vote on Warsh's nomination.
- All 13 Republicans on the panel are expected to support Warsh.
- Democrats are expected to vote against Warsh's nomination.
- Jerome Powell is likely holding his last policy-setting meeting as Fed chair.
Mentioned in this story
Kevin WarshJerome PowellThom TillisFederal ReserveDepartment of Justice
Kevin Warsh, Donald Trump’s pick to lead the Federal Reserve, is set to clear a key procedural hurdle on Wednesday, opening the way for him to succeed Jerome Powell in coming weeks amid the White House’s unprecedented efforts to exert control over the world’s most powerful central bank.
The Senate banking committee is set to vote at 10am EDT (1400 GMT) to advance Warsh’s nomination to the full Republican-controlled Senate. All 13 Republicans on the panel are expected to support Warsh after Thom Tillis, a North Carolina senator, dropped his opposition following the Department of Justice’s decision on Friday to end a criminal investigation into Powell that Tillis viewed as a threat to the Fed’s political independence.
The panel’s 11 Democrats, who say they doubt Warsh’s promise to set policy without regard to the president’s wishes, are expected to vote against him.
The vote will take place as Powell leads what’s likely to be his last policy-setting meeting as Fed chief. The policy-setting federal open market committee is universally expected to leave its benchmark overnight interest rate unchanged in the current 3.50%-3.75% range, given still-elevated inflation and upward pressure on prices from the disruption to global oil supplies due to the Iran war.
There is little doubt that the Senate will confirm Warsh, a 56-year-old lawyer, financier and former Fed governor who has promised “regime change” for the central bank and who Trump has repeatedly said will deliver the rate cuts the president wants.
The timing of the confirmation vote is uncertain. If it follows the template for the Trump administration’s most recent Fed nominee, Warsh could be sworn in by 15 May when Powell’s leadership term ends.
What’s not clear is whether Warsh’s ascension would mean Powell’s exit from the Fed, or whether the current central bank chief would stay on as a member of its board of governors – and, if he does so, whether Trump will follow through on his threat to try to fire him. Such a move would surely draw a legal challenge, as did the president’s attempt last summer to fire , the Fed governor.
Q&A
What is the significance of Kevin Warsh's nomination for Fed chair?
Kevin Warsh's nomination is significant as it reflects the White House's efforts to influence the Federal Reserve's policies, particularly regarding interest rates.
What led to Thom Tillis dropping his opposition to Warsh's nomination?
Thom Tillis dropped his opposition after the Department of Justice ended a criminal investigation into Jerome Powell, which Tillis viewed as a threat to the Fed's independence.
What are the expected outcomes of the Senate banking committee vote on Warsh?
The Senate banking committee is expected to advance Warsh's nomination, with all 13 Republicans likely to support him, paving the way for confirmation in the full Senate.
