WASHINGTON — President Donald Trump’s nominee for Federal Reserve Chair, Kevin Warsh, pledged the central bank’s independence despite Trump’s call for rate cuts. Warsh, a past Fed board governor, faced scrutiny at his Senate confirmation hearing as Jerome Powell’s term nears its end. Trump’s legal probe into Powell over a $2.5 billion Fed office renovation complicates Warsh’s confirmation prospects.
Sen. Thom Tillis, R-N.C., opposes Warsh’s nomination until Trump halts the “bogus” investigation. With the Senate Banking Committee split, Tillis’s stance could stall Warsh’s advancement to the full Senate. Sen. Elizabeth Warren accused Trump of wanting a “sock puppet” to manipulate short-term economic policies before elections.
Tillis presented evidence of cost overruns at the Fed’s D.C. headquarters, arguing against penalizing officials for budget excesses. “Let’s get rid of this investigation so that I can support your nomination,” Tillis stated.
Court Action
U.S. District Judge James Boasberg halted subpoenas against Powell, citing Trump’s attempts to coerce him into lowering rates. Despite this, Trump remains persistent, with prosecutors visiting the Fed’s construction site, as reported by the New York Times. Trump’s public threats to dismiss Powell if rates don’t fall have been frequent.
Powell’s term ends on May 15, but he intends to remain as chair pro tempore until a successor is confirmed. Trump, however, has threatened to fire him if he doesn’t depart.
A ‘Battle-Tested’ Pick
Amidst Trump’s conflict with Powell, Republicans commend Warsh’s experience during the 2008 financial crisis. Senate Banking Chair Tim Scott praised Warsh for stabilizing the economy then. Democrats, however, questioned his independence from Trump, with Sen. Andy Kim asking about American families’ affordability struggles.
Warsh attributed current economic issues to past monetary policies, not directly addressing Trump’s influence. He emphasized the Fed’s focus on its primary responsibilities.
Lisa Cook Firing
Warren and Sen. Angela Alsobrooks highlighted Trump’s controversial firing of Fed Governor Lisa Cook, now under Supreme Court review. Warsh, asked about Cook’s defense, reiterated the Fed’s nonpartisan role and the ongoing legal process. Warsh assured the committee that Trump never pressured him on interest rates.
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