Senators Press Warsh on Conflicts, Trump Ties

Senators pressed Kevin Warsh on Tuesday at a Senate Banking Committee confirmation hearing in Washington about his investments in cryptocurrency and artificial intelligence firms, possible conflicts of interest and his ties to President Trump.

Warsh, the president’s nominee to succeed Jerome Powell as Federal Reserve chair, faced questions from Democrats who sought clarity on whether he would act independently on interest rates, treat digital assets impartially and divest private holdings before taking office. Powell’s term is scheduled to end on May 15.

Committee ranking member Elizabeth Warren repeatedly called Warsh a “sock puppet” for the president and warned that confirming him could lead the Fed to “grant special accounts to [the Trump family’s] crypto company or bailouts to his friends on Wall Street if they get into trouble,” creating “more opportunities for Trump’s corruption.”

Sen. Jack Reed and other Democrats asked whether Warsh would cut interest rates, a policy President Trump has urged. Warsh told Republican Sen. John Kennedy that “the president never once asked me to commit to any particular interest rate decision, period, and nor would I ever agree to do so if he had, but he never did,” and stated he would not accept direction on specific policy actions.

Wyoming Sen. Cynthia Lummis questioned Warsh about cryptocurrencies. He replied that digital assets are “part of the fabric of our financial services industry in the United States” and said he intends to divest investments, including stakes in crypto and AI companies, before taking the oath if confirmed.

Committee Chair Tim Scott emphasized the need for both independence and cooperation between the Fed, the administration and Congress, noting that independence means the Fed must carry out its dual mandate.

With weeks to go before Powell’s term ends, senators signaled that confirmation may not be quick. Powell could continue to serve temporarily past May 15 until a successor is confirmed and remains on the Fed’s Board of Governors through 2028. A prediction market reflected expectations of delay: about 37% of positions bet Warsh would be confirmed by May 15, while roughly 78% bet confirmation would not occur before June 30.

Lawmakers focused on the possible influence of Warsh’s private investments and his relationship with the president. Warsh told the committee he would take steps to eliminate conflicts if confirmed, while Democrats pressed for more detailed recusal policies and timelines for divestiture.