Senate Banking Committee voted 13-11 along party lines to advance the nomination of Kevin Warsh as the next chair of the Federal Reserve, setting up a full Senate vote next month. If confirmed, Warsh would replace current chair Jerome Powell, whose term is set to end May 15. Republicans supported the nomination, while Democrats opposed it.
Warsh previously served on the Federal Reserve Board and has been openly critical of the institution’s recent performance. He argued that inflation reaching 9.1% in 2022 represented the central bank’s worst policy failure in decades. His nomination aligns with President Donald Trump, who has repeatedly criticized Powell for keeping interest rates too high and has pushed for lower borrowing costs.
At the same time, Powell chaired what could be his final policy meeting as Fed leader. The Federal Reserve chose to keep interest rates unchanged at 3.6%, again resisting pressure from Trump to cut rates. Powell also reportedly signaled he may remain on the Board of Governors after stepping down as chair, which would be unusual and would prevent Trump from immediately appointing another board member.
Scott Bessent criticized Powell’s reported plan to remain, saying it breaks with long-standing tradition. He praised Warsh as someone who could bring accountability, stronger management, and sound policy to the Fed. Committee chairman Tim Scott also endorsed Warsh, saying his leadership would help break the grip of “Bidenomics” on American households.
The report also described a separate legal dispute involving the Justice Department and the Federal Reserve. In March, James Boasberg blocked prosecutors from issuing grand jury subpoenas targeting the Fed Board. He said the effort appeared intended to pressure Powell rather than investigate wrongdoing. The inquiry reportedly focused on Powell’s 2025 Senate testimony about renovation costs at Fed headquarters in Washington, D.C..
Jeanine Pirro, whose office opened the investigation, said the Justice Department would appeal the ruling, accusing the judge of interfering with the legal process.
Overall, the developments reflect an intensifying struggle over the future direction and independence of the Federal Reserve.
