Kevin Warsh, President Donald Trump’s choice to head the Federal Reserve, successfully passed a critical Senate procedural vote on Monday, advancing his nomination to replace current Fed Chair Jerome Powell, whose term concludes this Friday.
Following Monday’s procedural vote, senators are anticipated to confirm Warsh for his 14-year Fed governor position as soon as Tuesday. After that confirmation, legislators will begin considering his concurrent four-year appointment as Fed chair, with that final vote potentially occurring by Wednesday.
The Republican-majority Senate is widely expected to approve Warsh’s nomination during a period when questions about the central bank’s independence have intensified.
Trump has taken extraordinary steps to influence Fed operations, including attempting to remove Fed Governor Lisa Cook in a matter now pending before the Supreme Court. He also backed a Department of Justice probe into Powell’s handling of a building renovation project, which a federal judge determined was a pretext for pressuring Powell to lower interest rates or step down.
Although the Justice Department discontinued its investigation, the lead prosecutor in Washington has indicated the possibility of reopening it. Powell has stated he will remain in his position until the matter is definitively resolved.
Powell has expressed concern “about the series of legal attacks on the Fed which threaten our ability to conduct monetary policy without considering political factors.” Warsh has remained silent regarding the Trump administration’s actions toward the Fed.
Warsh has announced plans for “regime change” at the Federal Reserve, including strengthening coordination with the Treasury Department and administration on non-monetary matters, while working toward reducing the Fed’s balance sheet.
While Trump has indicated his expectation that Warsh will reduce interest rates, Warsh has maintained that he has made no commitments to Trump regarding monetary policy decisions.
The Fed chair holds one vote among 12 on interest rate decisions and represents one voice among 19 at policy-making discussions.
During their most recent meeting last month, Fed officials voted to maintain the policy rate between 3.50% and 3.75%, with three central bankers dissenting to signal their willingness to consider a potential rate increase.
The Federal Reserve’s upcoming meeting, which would be Warsh’s first as chair if confirmed, is set for June 16-17.
