The United States Senate on Wednesday confirmed Kevin Warsh as the next chairman of the Federal Reserve.
Warsh, 56, a former Federal Reserve governor and investment banker and President Donald Trump’s nominee, was anointed to run the world’s most influential central bank in a 54-45 vote that was mostly divided on party lines.
He will replace Jerome Powell, whose tenure as chair started in 2018 and ends on 15 May after years of clashes with Trump over interest rates and the independence of the Fed.
Warsh will take charge at a crucial time for the U.S. economy, with inflation surging and amid fears he will bow to pressure from Trump to quickly cut interest rates.
He was one of the Fed’s Board of Governors from 2006 to 2011 during the global financial crisis, but has since criticised the central bank’s handling of inflation.
But Warsh denied at his Senate confirmation hearing that Trump had pressured him to reduce the Fed’s key rate or that he would act as the President’s “human sock puppet”.
“I will be an independent actor if confirmed as chair of the Federal Reserve,” he said.
The confirmation was welcomed by the White House, with spokesman Kush Desai quoted in this CNBC story as saying: “The Senate’s confirmation of Kevin Warsh as the next Chairman of the Federal Reserve is a welcome step towards finally restoring accountability, competence, and confidence in Fed decision-making.”
Powell is expected to remain on the Fed’s Board of Governors until 2028, creating the odd situation of a former Fed chair continuing to serve alongside a successor.
Powell made this decision in response to what he called “series of legal attacks on the Fed which threaten our ability to conduct monetary policy without considering political factors”.
The Fed chair has one of 12 votes on the interest-rate-setting Federal Open Market Committee and is one of 19 people sitting at the policy-setting table.
The Fed's next meeting, likely to be the first chaired by Warsh, is scheduled for 16 and 17 June.
Just one Democrat, John Fetterman of Pennsylvania, cast his vote with the Republican majority to confirm Warsh.
At one stage, almost a dozen candidates were being considered for the role.
