①The U.S. Senate Banking Committee voted to advance Kevin Warsh's nomination for Federal Reserve Chair to the next stage, paving the way for a final confirmation vote in the Senate; ②Warsh’s nomination will be submitted to the full Senate for consideration, with a vote possible as early as the week of May 11, and if passed, Warsh could be sworn in on May 15.
Cailian Press reported on April 29 (edited by Niu Zhanlin) that the U.S. Senate Banking Committee voted on Wednesday to advance Kevin Warsh's nomination for Federal Reserve Chair to the next stage, paving the way for a final confirmation vote in the Senate.
The vote strictly followed party lines, with all 13 Republican members of the Senate Banking Committee voting in favor, while all 11 Democratic members voted against.
After passing this procedural hurdle, Warsh’s nomination will be submitted to the full Senate, which is controlled by Republicans, for consideration. It is almost certain that the Senate will ultimately confirm Warsh’s nomination.
The earliest possible date for a full Senate vote on Warsh's nomination is the week of May 11. If the vote takes place then, Warsh may be sworn in on May 15, the same day Powell’s term as chair expires.
Massachusetts Democratic Senator Elizabeth Warren, a senior member of the Banking Committee, fiercely criticized Warsh before the vote, warning that his confirmation would weaken the Federal Reserve’s independence relative to the executive branch.
Warren stated, “The U.S. economy under Trump’s administration faces serious issues. Inflation is rising, job growth is slowing, and the specter of stagflation is looming, while President Trump is becoming increasingly impatient.”
She added, “If this committee votes today to advance Mr. Warsh to the next stage, it will bring the president closer to completing his unlawful attempt to seize control of the Federal Reserve and artificially stimulate the economy.”
As widely expected by the market, Warsh successfully cleared the committee hurdle. This development occurred just hours before the Federal Reserve was set to announce its latest interest rate decision, which could mark the last interest-rate meeting chaired by Powell.
In light of persistent inflationary pressures, an overall robust labor market, and ongoing price shocks related to the war with Iran, the Federal Reserve is expected to maintain a 'wait-and-see' strategy, making further interest rate cuts temporarily unlikely.
The cautious policy adopted by the Federal Reserve has become a major source of prolonged friction between Trump and Powell. Powell has faced harsh criticism from the White House for refusing to cut interest rates significantly or rapidly as Trump demanded.
Critics, as well as Powell himself, have stated that this pressure campaign has gone beyond mere verbal criticism.
The U.S. Department of Justice previously launched a criminal investigation targeting Powell and the Federal Reserve, reportedly focusing on cost overruns in a multi-billion-dollar renovation project at the central bank's Washington, D.C. headquarters. When Powell disclosed the investigation in January, he issued a statement claiming that the government was targeting him due to dissatisfaction with the Fed's interest rate policy decisions.
This investigation once threatened to derail the nomination process for Warsh. Senator Thom Tillis, a member of the Senate Banking Committee and a Republican from North Carolina, stated that he would block Trump’s nomination unless the Department of Justice dropped its investigation into Powell.
Trump had publicly supported the investigation led by U.S. prosecutor Jenny Piro, even though a federal judge hindered her efforts by blocking the issuance of a grand jury subpoena.
As recently as last Wednesday, Piro indicated that she would appeal the ruling; however, just two days later, she abruptly announced that the Department of Justice would withdraw the investigation.
Following this, Tillis stated that he would no longer oppose Warsh’s nomination, virtually ensuring that Trump’s nominee could proceed smoothly to the next stage.
Editor/Deng