WASHINGTON — With the Senate Banking Committee on Wednesday advancing the nomination of Kevin Warsh to lead the Federal Reserve, clearing the way for a likely confirmation vote by the full Senate, current Fed Chair Jerome Powell said he plans to remain on the board for a period “to be determined.”
The committee approved Warsh along party lines, with all 13 Republicans voting in favor and all 11 Democrats opposed.
As the CU Daily has reported, Warsh’s path forward had been uncertain until recently, as Sen. Thom Tillis had withheld support over concerns about a Justice Department criminal investigation involving current Fed Chair Jerome Powell. The Justice Department said last week it would drop the investigation, prompting Tillis to back the nomination.
The committee action puts Warsh on track for confirmation in time to lead the Fed’s June policy meeting, which would be the first following the end of Powell’s term as chair on May 15. The Fed’s policy decision scheduled for Wednesday afternoon is expected to be Powell’s final one as chair.
Heightened Scrutiny
Warsh’s nomination comes amid heightened political scrutiny of the central bank. Democrats have raised concerns about whether he would maintain the Fed’s independence in the face of pressure from Donald Trump.
“What Donald Trump wants is for the Fed to be under his complete control,” Sen. Elizabeth Warren, the committee’s top Democrat, told reporters ahead of the vote.
Powell to Remain
Meanwhile, Powell said he has no plans to exit after his term as chair ends May 15. He pointed to lingering threats against him and the central bank as part of a pressure campaign by President Trump for lower borrowing costs as reasons for remaining.
“I worry that these attacks are battering the institution and putting at risk the thing that really matters to the public, which is the ability to conduct monetary policy without taking into consideration political factors,” Powell said. “I plan to keep a low profile as a governor.”
As analysts have noted, Fed chairs typically step down after their four-year terms, unless reappointed by the White House, in an effort to ensure as smooth a leadership transition as possible. The last time a chair stayed on past the end of their term was in 1948, when Marriner Eccles continued to serve as a governor for three years.
