Kevin Warsh, second from left, listens during a panel discussion at the Semafor 2024 World Economy Summit on April 18, 2024 in Washington, DC (Photo by Tasos Katopodis/Getty Images for Semafor)
WASHINGTON – President Donald Trump’s election as the up-to-date Federal Reserve chairman is likely to face headwinds in the U.S. Senate as a key lawmaker speaks out against the government’s ongoing criminal investigation into current Fed chief Jerome Powell.
Trump announced early Friday that he has named Kevin Warsh to lead the central bank after Powell’s term ends in May. Warsh served on the Federal Reserve Board of Governors from 2006 to 2011 after being nominated by President George W. Bush and is a visiting scholar at Stanford University’s business school and the university’s conservative think tank, the Hoover Institution.
“I have known Kevin for a long time and have no doubt that he will go down in history as one of the GREAT Fed Chairs, perhaps the best,” Trump said wrote on his own platform Truth Social. “To make matters worse, he is the central casting agent and will never let you down.”
But the president is missing the vote he needs to get the nominee through the closely divided Senate Banking Committee if all Democrats on the panel vote against it.
Sen. Thom Tillis, R-N.C., a member of the Banking Committee, praised Warsh as a “qualified candidate with a deep understanding of monetary policy.”
But Tillis, who is retiring after this term, said he would not vote for the election if Trump continues to investigate Powell over allegations that he lied to Congress about the cost of renovating the Fed’s headquarters in Washington, D.C.
“Protecting the Federal Reserve’s independence from political interference or legal intimidation is non-negotiable. My position has not changed: I will refuse to confirm any Federal Reserve nominee, including for the position of Chairman, until the DOJ investigation into Chairman Powell is fully and transparently resolved,” Tillis said wrote on social media Friday morning.
The Federal Reserve has significant influence over the country’s economy numerous Experts advise Separation of monetary policy and political influence. Adjusting interest rates to cold inflation or stimulate the economy is a central bank tool to achieve maximum employment and price stability.
Threats to Powell
Trump has repeatedly publicly threatened to fire Powell if the chairman didn’t cut interest rates more aggressively.
Powell revealed In mid-January, he announced that he had received a federal grand jury subpoena from the Justice Department to investigate whether he lied to Congress about construction costs.
Powell said in a occasional video statement at the time that the investigation was not just about oversight but rather about “setting interest rates based on our best assessment of what serves the public and not following the president’s preferences.”
Deputy Attorney General Todd Blanche declined to comment Friday on the status of the subpoenas when asked whether Trump’s nomination process would speed up the Powell investigation.
“I don’t believe the timing of President Trump’s decision to nominate anyone is a determining factor in any investigation,” he told reporters at an unrelated news conference at the Justice Department.
No commitment to lower rates
Trump praised Warsh on social media Friday morning as he announced his decision.
Warsh, a former New York banker and economic adviser to Bush, served on the Fed board during the turbulent global financial crisis.
Trump told reporters Friday afternoon that he had not asked Warsh about a commitment to lower interest rates.
“I don’t want to ask him that question. I think it’s inappropriate. Probably, probably it would be allowed, but I want to keep it nice and pure. But he definitely wants to lower interest rates. I’ve been watching him for a long time,” Trump said.
When asked about Tillis’ opposition, Trump called the senator an “obstructionist.”
“I mean, you know, if he doesn’t approve, we’ll just have to wait for someone to come in and approve it, right?” said Trump.
Sen. Elizabeth Warren, D-Mass., a member of the Senate Banking Committee, urged her Republican colleagues on the panel to oppose Trump’s pick.
“Trump cannot appoint his next Fed puppet all on his own. The Senate must agree to this. Any senator who claims to care about Fed independence, including my Republican colleagues, should refuse to proceed with this nomination period until Trump stops his witch hunts,” Warren said in a video News posted on social media Friday afternoon.
Powell wasn’t Trump’s only target at the Federal Reserve. The president is waiting for a decision by the U.S. Supreme Court over whether he broke the law when he used social media over the summer to fire Federal Reserve Board Gov. Lisa Cook, a nominee of President Joe Biden.
Jacob Fischler and Shauneen Miranda contributed to this report.
