Senate confirms Fed chair nominee Kevin Warsh, ending standoff over Powell probe
The Senate voted Wednesday to confirm Federal Reserve chair nominee Kevin Warsh, clearing the way for Warsh to replace central bank head Jerome Powell when his term ends later this week.
The Senate confirmed Warsh by a vote of 54 to 45. Sen. John Fetterman, D-Pa., was the lone Democrat to vote in favor of Warsh.
The vote comes weeks after the Department of Justice moved to drop its criminal probe into Powell. Before that, Warsh had faced a bipartisan stonewall in the Senate Banking Committee over the investigation.
The probe into Powell focused on alleged false testimony to Congress about an office renovation. Powell, whose term ends on Friday, called the investigation a politically motivated effort to influence interest-rate policy.
Last month, Washington U.S. Attorney Jeaninne Pirro said the investigation into the office renovation would be taken up by the Fed’s inspector general.
Sen. Thom Tillis, R-N.C., who previously vowed to oppose Warsh's nomination on account of the investigation, said he would flip his vote after the investigation was set aside. Tillis greenlit the nomination in a committee vote last month, helping advance Warsh to a confirmation vote on the full Senate floor.
Powell said last month that he would stay on at the central bank's board of governors after his term expires next month as the investigation into the central bank's office renovation continues.
"I've said I won't leave the board until this investigation is well and truly over with transparency and finality, and I stand by it," Powell said at a press conference in Washington, D.C.
"My concern is really about the series of legal attacks on the Fed, which threaten our ability to conduct monetary policy without considering political factors," Powell added.
Trump previously denied any involvement in the criminal investigation.
Powell could remain on the Fed's 12-member policymaking board until 2028, retaining a role in the central bank's interest-rate policy over that period.
Warsh, a former Fed official, will serve a 4-year term as chair. He is currently a fellow at the Hoover Institution conservative think tank, which is based at Stanford University.
During his term as a Fed governor in the late 2000s and early 2010s, Warsh gained a reputation as an interest-rate “hawk,” meaning he generally preferred higher interest rates as a means of ensuring low and stable inflation.
In recent months, however, Warsh has voiced support for lower interest rates, rebuking the Fed’s concern about inflation risk posed by a flurry of new tariffs issued last year.
Warsh is set to take the helm of the Fed in a challenging period for central bank policymakers.
Inflation rose for a second consecutive month as the U.S.-Israeli war with Iran continued to send gasoline prices surging in April, government data on Tuesday showed. Annual inflation jumped to its highest level in three years, according to the U.S. Bureau of Labor Statistics.
The Fed has opted to hold interest rates steady at three consecutive meetings since the outset of 2026. Before that, the Fed cut interest rates a quarter-point three straight times.
If the Fed moved to raise interest rates, it would hike borrowing costs for many consumer and business loans, risking an economic slowdown.
Markets forecast a roughly 60% chance of interest rates holding steady for the remainder of this year, according to the CME FedWatch Tool. The odds of an interest-rate hike by the end of the year stand at about 30%.
