Warsh’s Confirmation Hearing Opens a Path to Lower Rates — and Tests the Fed’s Independence

Confirmation of Kevin Warsh as Federal Reserve chair would place a vocal critic of the central bank’s recent monetary policy in charge of setting interest rates by May, when Jerome Powell’s term expires. Warsh has blamed the Fed’s low interest rate policies after the pandemic for fueling the highest inflation spike in four decades, and now supports President Donald Trump’s push for lower borrowing costs. He argues that artificial intelligence will drive productivity gains strong enough to justify rate cuts without reigniting inflation — a view many Fed officials dispute. The Senate Banking Committee has scheduled Warsh’s confirmation hearing for April 21, setting the stage for a high-stakes debate over the future of monetary policy. Warsh needs a majority vote in the Senate to be confirmed, but Sen. Thom Tillis (R-N.C.) plans to block the nomination until a criminal investigation into Powell is resolved. That probe stems from the Justice Department’s subpoena of the Fed over Powell’s testimony on the central bank’s $2.5 billion building renovation project. Warsh, who previously served as a Fed governor and in the George W. Bush administration, has pledged to divest assets if confirmed, adhering to the central bank’s ethics rules. His confirmation would mark a sharp pivot in the Fed’s leadership and policy direction — one tied directly to the political calculus of a president who once claimed he was given bad advice for picking Powell.