The US Senate has confirmed Kevin Warsh as chair of the Federal Reserve for a four-year term, placing President Donald Trump’s nominee at the helm of the US central bank at a time of heightened scrutiny about interest rates and the Fed’s independence.
The Senate voted 54-45 to confirm Warsh as chairman of the Board of Governors of the Federal Reserve System.
The vote came one day after the Senate confirmed Warsh to serve as a member of the Board of Governors for a 14-year term.
Warsh will succeed Jerome Powell, whose term as Fed chair ends this week.
His confirmation followed the Senate Banking Committee’s approval of his nomination last week in a 13-11 party-line vote, after Republican Sen. Thom Tillis dropped his opposition.
Tillis had threatened to block the nomination from advancing in committee until the Justice Department ended its investigation into Powell for renovations at the Federal Reserve’s Washington, DC headquarters and alleged cost overruns.
Lower interest rates?
The Justice Department later closed its probe and asked Federal Reserve Inspector General Michael Horowitz to review the matter, clearing the way for Tillis to support moving Warsh’s nomination forward.
Warsh’s elevation comes as the Trump administration presses for lower interest rates, tax cuts and deregulation, putting the Fed’s policy direction and institutional independence under close market scrutiny.
The Fed has faced pressure from the White House as policymakers weigh inflation risks, labor market conditions and the economic effect of the Iran war.
Trump has previously said that he believes he should be able to influence the interest rate decisions of the next Federal Reserve chairman as he weighs candidates to assume the role.
"I think I certainly should have a role in talking to whoever the head of the Fed is, or the Fed," he told reporters at the White House early this year.
