Fed politics heats up

Kevin Warsh’s April 21 confirmation hearing turned into a test of whether the Federal Reserve can keep distance from the White House. (banking.senate.gov) The Senate Banking Committee hearing began at 10 a.m. in the Dirksen building, seven weeks after Warsh’s nomination reached the Senate on March 4 to replace Jerome Powell as Fed chair. (banking.senate.gov) (congress.gov) Warsh told senators he would “absolutely not” be President Donald Trump’s “human sock puppet,” and Bloomberg reported that he also said Trump had never asked him to commit on interest rates. (finance.yahoo.com) (bloomberg.com) The fight is landing as the Fed is already holding rates in a 3.50% to 3.75% range and signaling less appetite to cut. In its March 18 projections, the median Federal Open Market Committee estimate still pointed to one quarter-point cut in 2026, not a string of near-term reductions. (federalreserve.gov 1) (federalreserve.gov 2) Private forecasts moved further in the same direction this week. In a Reuters poll conducted April 17-21, 56 of 103 economists said the Fed would still be at 3.50% to 3.75% at the end of September, up from a late-March survey in which nearly 70% expected at least one cut by then. (money.usnews.com) That Reuters poll found no clear consensus for year-end, but 71 economists still expected at least one cut in 2026 while nearly one-third now saw no cuts at all this year. A month earlier, a Reuters poll had put the first cut in September. (money.usnews.com 1) (money.usnews.com 2) Markets traded the hearing as live macro news, not just Senate theater. Reuters reported U.S. stocks were lower on April 21 as Warsh testified, and CoinDesk said Bitcoin slid toward $75,000 while the S&P 500 and Nasdaq gave back early gains during the hearing. (msn.com) (coindesk.com) That trading reflex has spread into media coverage. Bloomberg’s Big Take podcast framed the hearing around Fed independence, and CoinDesk has been publishing separate stories tying Fed politics and Trump statements to short, sharp Bitcoin moves. (bloomberg.com) (coindesk.com) Warsh is not new to the institution he wants to run. He served as a Fed governor from 2006 to 2011, and his current nomination is for a four-year term as chair, with Powell’s term expiring. (congress.gov) (reuters.com) The next step is a committee vote and then a full Senate vote, but the hearing set the frame early: every answer on rates now doubles as an answer on presidential influence. (banking.senate.gov) (rollcall.com)