The Senate Banking Committee voted on party lines Wednesday to approve Kevin Warsh as the next chair of the Federal Reserve, replacing Jerome Powell. The vote was 13-11, with all Republican senators in favor and Democrats opposed.
Background on Kevin Warsh
Warsh, a former top Fed official, has been a sharp critic of the institution and Powell's leadership. He has called the inflation spike to 9.1% in 2022 the central bank's biggest policy mistake in four decades. A full Senate vote on his nomination likely won't occur until next month, but he could be confirmed before Powell's term as chair ends May 15.
Key Events Ahead
The Senate Banking vote is the first of two key events surrounding the Fed's leadership. Also Wednesday, Powell is presiding over what will likely be his last meeting of the Fed's interest rate-setting committee. At a news conference, Powell may indicate whether he will remain as a member of the central bank's board of governors after his term ends.
It would be unusual for Powell to stay, but doing so would deprive the Trump administration of an opportunity to appoint a new board member. Powell may choose to stay if he sees it as necessary to protect the Fed's independence.
