Senate panel advances Warsh 13-11; full Senate to vote

The Senate Banking Committee voted 13-11 on April 29 to advance Kevin Warsh’s nomination for chair of the Federal Reserve, moving the nomination to the full Senate for a final confirmation vote.

The executive session convened at 10 a.m. ET and was chaired by Sen. Tim Scott, Republican of South Carolina. All 13 Republicans on the panel supported Warsh; all 11 Democrats opposed the nomination.

Sen. Thom Tillis had previously blocked committee action while the Justice Department conducted a probe into renovations at the Fed chair’s office. The DOJ closed the inquiry around April 24, and Tillis lifted his hold ahead of Wednesday’s vote.

If the full Senate confirms Warsh, he could be sworn in on or after May 15, when Jerome Powell’s four-year term as chair expires. Powell’s underlying governor term runs through January 2028, allowing the possibility that he could remain on the Federal Reserve Board as a governor.

Warsh, 56, is a lawyer and financier who served on the Federal Reserve Board of Governors from 2006 to 2011 and was a voting member of the Federal Open Market Committee during the 2008 financial crisis. President Donald Trump nominated him earlier this year to replace Powell.

At his April 21 confirmation hearing, Warsh pledged to act independently if confirmed and answered questions about Fed independence, interest-rate policy, balance-sheet management and his relationship with the White House.

Warsh has criticized the Fed’s handling of the 2022 inflation cycle, which peaked at 9.1 percent, and he has expressed support for changes to the inflation framework, faster cuts to interest rates and a smaller Fed balance sheet. Democrats on the committee, led by Sen. Elizabeth Warren, raised concerns that his record could allow political influence to affect monetary policy.

Markets showed little immediate reaction to the committee vote. The Federal Reserve was widely expected to hold the federal funds target range at 3.50 percent to 3.75 percent at its April policy meeting, a decision seen as likely to be Jerome Powell’s final rate announcement as chair.

The full Senate is expected to take up the nomination in the coming weeks, with confirmation widely anticipated before mid-May. The Senate vote will determine who leads the central bank as lawmakers and markets focus on inflation, balance-sheet policy and the institution’s independence.