Kevin Warsh’s nomination as Fed Chair has now moved to the full U.S. Senate after the Senate Banking Committee voted along party lines Wednesday morning to advance Warsh to take the helm of the central bank after Jerome Powell steps down as chair May 15.
Here was the vote tally: 13 Republicans voted in favor of Warsh and 11 Democrats voted against.
“Kevin Warsh’s leadership is absolutely essential now at the Federal Reserve than ever before,” Sen. Tim Scott of South Carolina, who chairs the Senate Banking Committee, said after the vote. “Frankly, his time as a former governor of the Federal Reserve during the crisis makes him battle-tested and ready to serve, and not only serve, but to lead.”
Warsh’s nomination now goes to the Senate floor, where a simple majority is needed to make him the 17th chair of the Fed since 1913. CBS reported that vote is expected to happen the week of May 11, citing a spokesperson from Sen. Elizabeth Warren’s office.
Confirmation is Expected
Warsh, a former Fed governor, is widely expected to be confirmed and it would allow Warsh to take over at the central bank’s June 16-17 meeting.
Senator Thom Tillis, R-North Carolina, earlier had vowed to block Warsh’s nomination. He wanted the Justice Department to finish its investigation into Powell over the renovation of the Fed’s Washington, D.C., headquarters.
U.S. Attorney for the District of Columbia Jeanine Pirro announced on April 24 that her office would end the probe into Powell, and Tillis said he was prepared to advance Warsh’s nomination.
CBS reported that when Warsh testified before the Senate Banking Committee last week, he vowed to remain “strictly independent” in setting monetary policy. President Donald Trump has repeatedly called on the Fed to cut rates, raising questions about its ability to operate free of political influence.
Warren’s Warning
“The president never asked me to predetermine, fix or decide on any interest rate decision, nor would I ever do so,” Warsh said in response to a lawmaker’s question on whether Trump has ever pressured him to commit to cutting interest rates.
Warren, the banking panel’s ranking member, slammed Warsh before the vote, warning that his confirmation would erode the central bank’s independence from the executive branch, CNBC reported.
“The Trump economy is in real trouble. Inflation is up, job creation is down. The stink of stagflation is in the air, and President Trump is getting desperate,” Warren told the committee before it voted.
“A vote today by this committee to advance Mr. Warsh will bring the president one step closer to completing his illegal attempt to seize control of the Fed and to artificially juice the economy,” she said.
