The Senate on Tuesday confirmed Kevin Warsh to the Federal Reserve board, as President Trump’s nominee cleared another hurdle toward his path to becoming the central bank’s next chairman.
In a 51-45 vote, the Senate also approved a motion to invoke cloture, meaning there will be no more debate over Warsh’s nomination and a vote to confirm him as chairman will take place as soon as Wednesday evening.
Warsh – the 56-year-old financier slated to become the wealthiest Fed chairman in history – has been facing an uphill battle since the president selected him in January to replace outgoing Chair Jerome Powell.
Sen. Thom Tillis (R-NC) – who voted in favor of Warsh’s confirmation – had previously vowed to block his approval until the Department of Justice ended its criminal investigation into Powell over the Fed’s over-budget headquarters renovation.
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The DOJ scrapped the probe on April 24, clearing the way for Warsh. Trump, however, has signaled he is open to an alternative investigation into Powell, who he has lambasted for not slashing interest rates fast enough.
Sen. Elizabeth Warren (D-Mass.), the top Democrat on the Senate Banking Committee, has also opposed Warsh’s nomination.
During a Senate hearing last month, Warren called Warsh a “sock puppet,” accusing him of flip-flopping on his inflation hawk stance to “snag his dream job” under Trump.
Warsh – who is married to billionaire Estee Lauder heiress Jane Lauder – has argued that artificial intelligence will create a productivity boom while keeping prices low, allowing the Fed to slash rates.
His argument is that AI makes workers more productive, so companies can churn out the same out of work with fewer staffers – reducing inflation in the long run.
Economists have warned that heavy spending related to AI on data center construction and energy needs could actually reheat inflation in the short term.
Warsh has also been a harsh critic of his would-be colleagues, comparing Fed officials to “pampered princes.”
During his Senate hearing last month, Warsh refused to verbally defend Powell or Fed Governor Lisa Cook against the government’s criminal investigations.
He also seemingly jabbed at the Fed’s attention to climate change and racial inequity under the Biden administration, saying the central bank needs to “stick to its lane.”
Warsh blasted the Fed for changing its inflation framework in 2020, which he blamed for the “inflation surge…we’re still living with.”
He also criticized Fed officials for being outspoken on the direction of interest rates when “we need central bankers who are humble, who are nimble, who can react,” adding that he wants more of a “family fight” over policy direction at future central bank meetings.
