Senate schedules April 29 confirmation vote for Kevin Warsh as Federal Reserve chair

The Senate Banking Committee posted notice of the April 29 confirmation vote for Kevin Warsh shortly after U.S. Attorney for Washington, D.C., Jeanine Pirro announced Friday that her office would drop its probe into Powell. Pirro said the Inspector General's office would take up an inquiry into the Fed's building renovation spending — which has grown to an expected $2.5 billion — and that the DOJ would restart the investigation if the IG's report provided justifying information.

Sen. Elizabeth Warren (D-MA), ranking member of the Senate Banking Committee, said the DOJ's move did not adequately protect the Fed's independence. Warren wrote that the DOJ's spokeswoman had indicated the investigation "still continues" and that a separate probe into Fed Governor Lisa Cook remained active. Warren described Warsh as "nothing more than President Trump's sock puppet," based on his performance at his nomination hearing, and said no senator claiming to care about Fed independence should support advancing his nomination.

Warsh's confirmation is expected to pass. At his Senate hearing Tuesday, Warsh pledged independence from White House pressure but said relatively little about the direction he would take interest rates. President Trump has publicly said he expects rates to fall once Warsh takes office, telling Fox Business, "when Kevin gets in, I do ... interest rates should be much lower."

Economists and market analysts quoted by the Associated Press described significant obstacles to near-term rate cuts. Inflation rose to a two-year high of 3.3% in March — above the Fed's 2% target — driven in part by rising oil and gas prices tied to the Iran war that began February 28. The Fed's short-term rate currently stands at approximately 3.6%. Wall Street futures pricing, as reported by the AP, shows little expectation of a rate cut until October 2027.

Warsh would be one of 12 voters on the Fed's rate-setting committee, which voted 11-1 to keep rates unchanged in March. The AP reported that a faction of committee members has discussed the possibility of raising rates, not cutting them, at upcoming meetings. Jon Faust, an economist at Johns Hopkins and former adviser to Powell, said Warsh "comes in with essentially none of the gravitas" that past chairs used to move the committee, adding that Trump's public pressure has raised "legitimate questions about whether he'll act independently." One way to demonstrate independence, economists told the AP, would be for Warsh to refrain from cutting rates immediately upon taking office.