US Senate Committee Approves Kevin Warsh as Fed Chair Nominee

The US Senate Banking Committee voted 13-11 along party lines on April 30, with all Republicans in favor and all Democrats against, to approve Kevin Warsh as Chair of the Federal Reserve. The nomination now moves to the full Senate for a final confirmation vote, expected as early as May 11.

Warsh, who served as a Fed governor from 2006 to 2011, is President Donald Trump's pick to replace current Chair Jerome Powell. Powell's term as chair ends on May 15.

Warsh's path to nomination faced a hurdle when Republican Senator Thom Tillis of North Carolina said he would not vote for any Trump Fed nominee unless a criminal investigation into Jerome Powell was dropped. Last week, the US Justice Department formally halted the probe after finding no evidence of wrongdoing. Tillis then lifted his hold, clearing the way for approval.

Democratic senators, including Elizabeth Warren of Massachusetts, expressed concern that Warsh would be a "puppet" for President Trump, who has repeatedly pushed for deeper rate cuts. On Truth Social in December, Trump said he would only appoint someone to the Fed who agreed with his views.

Experts are watching Jerome Powell's next move. Trump has said he would fire Powell if he does not leave the Fed entirely by May 15. Normally, after stepping down as chair, Powell could remain a Fed governor until 2028. Skanda Amarnath, a former New York Fed analyst, noted: "It's hard not to see the threat of removal from the President weighing heavily on Powell's decisions from now on."

US stock markets reacted mixedly to the news. The Nasdaq rose 0.1%, the S&P 500 edged up 0.04%, while the Dow Jones fell 0.4% in midday trading.