Senate confirms Kevin Warsh as Fed chair

The U.S. Senate confirmed Kevin Warsh as chair of the Federal Reserve on Wednesday, installing President Donald Trump’s pick to lead the central bank after Jerome Powell’s term ends this week. The confirmation followed a separate Senate vote a day earlier that put Warsh on the Fed’s Board of Governors for a 14-year term. (senate.gov) The votes cap a weeks-long confirmation fight that drew questions about Fed independence, Warsh’s finances and his relationship with the White House. (senate.gov) Warsh, a former Fed governor and Morgan Stanley banker, now takes over at a time of persistent inflation pressure and continued political scrutiny of interest-rate policy. (abcnews.com) ### How did the Senate get Warsh into the job? The Senate confirmed Warsh to the chairmanship on May 13, according to the Senate’s nominations record, after first confirming him to the Board of Governors on May 12. The Senate record lists the chairmanship as nomination PN855-1 and the board seat as PN855-2. The May 12 roll call on the board seat was 51-45, with four senators not voting, according to the Senate’s official tally. Democrat John Fetterman of Pennsylvania voted with Republicans on that nomination. ABC News, AP and Politico reported that the Senate confirmed Warsh as chair on May 13 and that Fetterman was the only Democrat to back him on the final vote. (senate.gov) Those reports put the chairmanship vote at 54-45. ### Who is Kevin Warsh, and why was he Trump’s choice? Warsh, 56, previously served as a Federal Reserve governor from 2006 to 2011 and was a Morgan Stanley executive before joining the central bank, according to AP’s profile of him after the confirmation. (senate.gov) President Trump selected him to succeed Powell after months of public criticism of the Fed’s rate policy. (senate.gov) AP reported that Trump viewed Warsh as someone who could help deliver faster growth, while Warsh has argued publicly that the Fed has room to lower rates. Reuters reported on May 13 that Warsh returns to the Fed with plans to reshape an institution he has criticized for years. (abcnews.com) ### What did Warsh say about Fed independence? Warsh told the Senate Banking Committee on April 21 that he owed “my best judgment and most faithful efforts” to the mission Congress assigned the Fed, including price stability and full employment, according to his prepared testimony released by the committee. (apnews.com) CBS News reported from the hearing that Warsh said the central bank would remain “strictly independent” in setting monetary policy. AP reported the same day that Warsh said he had never promised the White House he would cut interest rates. (apnews.com) The Banking Committee hearing on April 21 ran nearly three hours and covered both his board nomination and his nomination as chair, according to the committee’s hearing page. ### Why did Democrats focus on his finances and relationships? Senate Banking Committee Democrats released a minority staff report on April 20 that said Warsh had not disclosed key sources of wealth and had not provided enough detail about planned divestitures. (banking.senate.gov) The report also said his finances raised questions about whether the public could be confident he would act in the economy’s interest rather than his own. (cbsnews.com) Roll Call reported from Warsh’s April 21 hearing that Democrats also pressed him on financial conflicts while he pledged to preserve Fed independence. (banking.senate.gov) Separate media profiles this week highlighted Warsh’s family tie to billionaire Ronald Lauder, his father-in-law, as his nomination drew broader attention. ### When does Warsh actually take over? Jerome Powell’s term ends on Friday, ABC News reported on May 13, and Warsh’s confirmation clears the way for the handoff at that point. The Senate’s nominations page shows Warsh’s four-year term as chair was confirmed on May 13. (banking.senate.gov) The next scheduled milestone for investors is the Fed’s next policy meeting, where Warsh will face his first major public test as chair if he is in place by then. Reuters reported that his early tenure will be watched for how he handles inflation, rates and internal Fed governance. (msn.com) (abcnews.com) (rollcall.com)