Warsh faces tough grilling

Kevin Warsh spent Tuesday defending his independence from President Donald Trump as senators opened his confirmation hearing to lead the Federal Reserve. (banking.senate.gov) (cbsnews.com) The Senate Banking Committee scheduled the hearing for 10 a.m. on April 21 in Dirksen 538, on Warsh’s nominations to both a 14-year term on the Board of Governors and a four-year term as chair. (banking.senate.gov) (senate.gov) Warsh told senators that “monetary policy independence is essential” and said Trump had never asked him to pre-commit to an interest-rate decision. CNBC reported he also rejected Sen. Elizabeth Warren’s charge that he would serve as Trump’s “sock puppet.” (cbsnews.com) (cnbc.com) Warren used the opening of the hearing to press Warsh on two fronts: whether he would resist White House pressure on rates and how he would handle personal finances that CNBC said could make him the wealthiest Fed chair in history. (cnbc.com 1) (cnbc.com 2) The hearing landed in the middle of a broader fight over how much political pressure the central bank can absorb. Trump has repeatedly pushed for faster rate cuts, while Jerome Powell has said Fed decisions should follow economic data, not demands from elected officials. (cbsnews.com) (cnbc.com) Warsh is not new to the institution he wants to run. Federal Reserve history records show he served as a governor from February 24, 2006, until March 31, 2011, during the financial crisis and its aftermath. (federalreservehistory.org) That record is part of why senators focused so heavily on his current views on inflation and rates. CBS reported that Warsh has recently signaled support for cutting the benchmark rate, a shift from the more hawkish reputation he built during and after his earlier Fed tenure. (cbsnews.com) (federalreservehistory.org) The hearing also picked up an unexpected sidelight when Larry Fitzgerald, the former Arizona Cardinals star and 2026 Pro Football Hall of Fame inductee, appeared seated directly behind Warsh. Barron’s and Yahoo Sports both reported the appearance, and Yahoo said the two are apparently friends. (barrons.com) (sports.yahoo.com) Democrats had been laying the groundwork for a hard hearing before Tuesday. In March, Warren publicly demanded answers from Warsh about reported appearances of his name in Justice Department-released Epstein files and urged Republicans to delay the hearing while investigations touching the Fed continued. (banking.senate.gov) Warsh’s next hurdle is a committee vote: CBS reported that a majority of the 24-member panel must approve him before the full Senate can take up the nomination by simple majority. Tuesday’s hearing showed the central question he still has to answer is whether senators believe a Trump nominee can run the Fed without taking orders from the White House. (cbsnews.com) (banking.senate.gov)