US Politics
Trump Fed chair nominee Kevin Warsh is confirmed by Senate as Jerome Powell vows to stay on board
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Donald Trump’s Fed chair nominee has been confirmed by the Senate after months of the president’s attempts to pressure the Federal Reserve’s existing chair to leave the position.
Kevin Warsh cleared a key procedural vote on Monday before his final confirmation vote Wednesday afternoon. He was confirmed by a vote of 54 to 45 after GOP Sen. Thom Tillis, who sits on the Senate Banking Committee, ended his opposition to Warsh and joined with his fellow Republicans to confirm the Harvard Law alum to the Federal Reserve, where he previously served as a member of the Board of Governors during the 2008 financial crash.
Tillis, a conservative who broke ranks to oppose the GOP’s “Big, Beautiful Bill” last year, opposed Warsh’s nomination because the president was involved in a campaign to force current Fed Chair Jerome Powell, out of office. That pressure campaign culminated in a DOJ investigation into Powell over renovations being done to the Fed’s headquarters, which Tillis called on Trump to end before he’d vote for Warsh. The Justice Department announced in late April that it was dropping the case against Powell.
While that smoothed things over on Capitol Hill, where more than just Tillis in the GOP caucus found Trump’s weaponization of the DOJ against Powell distasteful, the president appears to have still kicked the hornets’ nest when it comes to Powell, who said in a statement that he would remain on the Federal Reserve’s Board of Governors until his full term ended.
“I worry that these attacks are battering the institution and putting at risk the thing that really matters to the public, which is the ability to conduct monetary policy without taking into consideration political factors,” he told reporters on April 29.
Even as senators questioned whether he would be truly independent of the president, Tillis and others have acknowledged that they view Warsh as extremely qualified for the role of Fed chair.
“You have extraordinary credentials,” Tillis told Warsh during the latter’s confirmation hearing before the Banking panel. “They’re impeccable.”
Senators in Trump’s own party have been Powell’s lifelines for months as they have pushed back, publicly and privately, against Trump’s efforts to remove the Fed chair. Tillis and others threatened to block Trump’s nominees if the president fired Powell, eventually causing the president to back off his threats to do so last year.
Trump’s dispute with Powell hinges on interest rates, which the president has called on Powell to lower countless times. In Truth Social posts and public appearances alike, he has dubbed the Fed Chair “Too Late” for his hesitance to lower interest rates, which the president believes are stunting U.S. economic growth. Powell, meanwhile, has warned publicly that Trump’s own tariff agenda implemented last year (and later tossed out by the Supreme Court) is causing the very inflation that is causing his hesitance to lower interest rates.
Warsh, for his part, denied that Trump made him commit to rate cuts before his selection: “The president never asked me to commit to interest rate cuts…He didn’t ask for it, he didn’t demand it, he didn’t require it, and nor would I have done so.”
He laid out his own view of the importance of the Federal Reserve’s independence from the White House during his confirmation process, which Tillis highlighted as a reason for his support. Economists fear that the independence of the Fed, were it to be eroded like the independence of the Justice Department has over the past year, would cause havoc in the economy as the board’s decisions would be increasingly governed by political convenience rather than hard economic models.
“We worked a lot over the weekend to make sure that we were very clear that we have assurances from the DOJ that I needed to feel like they were not using the DOJ as a weapon to threaten the independence of the Fed. So this will allow Mr. Warsh to move on with his confirmation on time,” Tillis told NBC’s Meet the Press last month.
The Department of Justice is not bound to its decision to drop the case against Powell and could theoretically resume it in the future.