WASHINGTON — President Donald Trump’s nomination of Kevin Warsh as the new Federal Reserve chair may face challenges in the U.S. Senate. A key senator opposes the administration’s criminal investigation into current Fed leader Jerome Powell.
Trump announced his decision early Friday, selecting Warsh to succeed Powell when his term ends in May. Warsh, who served on the Federal Reserve Board of Governors from 2006 to 2011 under President George W. Bush, is a visiting scholar at Stanford University and the Hoover Institution.
“I have known Kevin for a long period of time, and have no doubt that he will go down as one of the GREAT Fed Chairmen, maybe the best,” Trump wrote on Truth Social. “On top of everything else, he is ‘central casting,’ and he will never let you down.”
Trump currently lacks the votes needed to push Warsh through the Senate Banking Committee if all Democrats oppose the nomination.
Sen. Thom Tillis, R-N.C., a Banking Committee member, praised Warsh as a “qualified nominee with a deep understanding of monetary policy.” However, Tillis stated he would not support the nomination if Trump persists in investigating Powell regarding alleged false statements to Congress about renovation costs at the Fed’s headquarters.
“Protecting the independence of the Federal Reserve from political interference or legal intimidation is non-negotiable. My position has not changed: I will oppose the confirmation of any Federal Reserve nominee, including for the position of Chairman, until the DOJ’s inquiry into Chairman Powell is fully and transparently resolved,” Tillis wrote on social media.
The Federal Reserve wields significant influence over the U.S. economy, and experts advise separating monetary policy from political influence. Adjusting interest rates is one tool to meet employment and price stability goals.
Threats to Powell
Trump has repeatedly threatened to fire Powell if he did not lower interest rates more aggressively. Powell revealed in January a federal grand jury subpoena related to whether he lied to Congress about costs.
He emphasized that the investigation focuses on setting interest rates based on public interest, not presidential preferences. Deputy Attorney General Todd Blanche declined to comment on whether the nomination would expedite the Powell probe.
No Commitment to Lower Rates
Warsh, a former New York banker, served on the Fed board during the global financial crisis. Trump said he did not ask Warsh about lowering rates, emphasizing a desire to keep the process “nice and pure.”
Sen. Elizabeth Warren, D-Mass., urged her Republican colleagues to oppose Trump’s pick, highlighting concerns about Fed independence. She stated, “Trump can’t appoint his next puppet to the Fed all by himself. The Senate has to approve it.”
Trump awaits a Supreme Court ruling on whether he violated the law by firing Fed Board Gov. Lisa Cook, appointed by President Joe Biden.
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