Kevin Warsh Vows Independence, Trump Pushes Rate Cuts
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- Kevin Warsh testified before the Senate Banking Committee, pledging the Federal Reserve will stay “strictly independent” if confirmed as chair.
- President Trump has publicly demanded the new Fed chair lower interest rates and threatened to fire Chair Jerome Powell if rates are not cut, prompting a criminal probe into Powell over a $2.5 billion renovation project.
- Senator Thom Tillis said he will vote against Warsh’s nomination until Trump ends the “bogus” investigation into Powell, while all Democrats on the committee plan to oppose the nominee.
- Judge James Boasberg blocked the administration’s subpoenas targeting the Fed and Powell, citing a “mountain of evidence” that the probe is being used to force rate cuts or a resignation.
- Senate Banking Chair Tim Scott praised Warsh as “battle‑tested” for his role steering the Fed during the 2008 financial crisis.
- Senator Elizabeth Warren warned that Warsh must defend Governor Lisa Cook’s tenure and keep the Fed “in its lane,” referencing the Supreme Court case over Cook’s firing.
- Jerome Powell’s term expires May 15, and he intends to serve as chair pro tempore until a successor is confirmed, despite Trump’s threats.
Why it matters: The clash pits Trump’s drive to force rate cuts against a Senate‑blocked probe and bipartisan opposition, meaning the Fed’s ability to set policy without presidential meddling hangs in the balance; confirming Warsh could preserve independence, while a Trump‑favored chair might tilt rates lower, affecting borrowers and investors.
