Kevin Warsh confirmed as Federal Reserve chair amid controversy

Kevin Warsh has been confirmed by the US Senate to chair the Federal Reserve’s Board of Governors, succeeding Jerome Powell, whose term ends Friday.

The Senate voted 54-45 on Wednesday to confirm Warsh, with Senator John Fetterman of Pennsylvania, a Democrat, joining Republicans in a contentious confirmation process.

On Tuesday, Warsh, 56, President Donald Trump’s nominee to replace Powell, was confirmed to a 14-year term on the central bank’s Board of Governors in a 51-45 vote, again with Fetterman crossing party lines.

Warsh’s swearing-in for both positions awaits final paperwork from the White House.

His confirmation comes amid rising concerns about the US central bank’s independence and increasing inflation.

During his confirmation hearing before the Senate Banking Committee late last month, Senator Elizabeth Warren accused Warsh of being a “sock puppet” for Trump.

Warsh, who served on the Fed Board of Governors from 2006 to 2011, supported rate hikes in 2024 under President Joe Biden but shifted his stance after Trump took office, advocating for rate cuts and echoing Trump’s demands for more aggressive reductions.

The Trump administration has sought greater control over the central bank in the past year, including an attempt to fire Fed Governor Lisa Cook, a Biden appointee, over alleged mortgage fraud, and a call for a Justice Department investigation into Powell’s management of a building renovation project, which a federal judge ruled was a pretext to pressure Powell to cut rates or resign.

The Justice Department dropped the investigation after Senator Thom Tillis of North Carolina, a ranking member of the Senate Banking Committee, said he would not vote to advance Trump’s nominee to lead the central bank until the probe ended.

Warsh has advocated for “regime change” at the Fed, pushing for a smaller balance sheet, which he argues would allow for a lower policy rate.

The Fed’s next meeting, the first Warsh will chair, is scheduled for June 16-17.

CME FedWatch, which tracks the probability of monetary policy outcomes, indicates a 97% chance that rates will remain unchanged at the next meeting, with expectations that the central bank will hold interest rates at 3.50% to 3.75% for the remainder of 2026.

This comes amid surging oil prices and a Consumer Price Index report released Tuesday showing consumer prices rose 0.6% in April, following a 0.9% increase in March on a monthly basis, with an annual increase of 3.8% from a year earlier.