Kevin Warsh, nominated by President Donald Trump to lead the US Federal Reserve, faced pointed questioning from senators on Tuesday during his confirmation hearing before the Senate Banking Committee, pledging to act independently and to sell off nearly all of his financial assets if confirmed. The hearing, held on Capitol Hill in Washington, laid bare deep tensions over central bank autonomy, Warsh's extensive personal wealth, and the political circumstances surrounding the nomination.
Warsh, a 56-year-old lawyer and financier who previously served on the Fed's Board of Governors from 2006 to 2011 during the global financial crisis, opened with a firm defence of monetary independence. "Let me be very clear: the independence of monetary policy is essential," he told the 24-member committee. The statement came just hours after Trump told CNBC he would be "disappointed" if Warsh did not cut interest rates "immediately" upon taking office, and reiterated his view that the United States should have "the lowest rates in the world." When Republican Senator John Kennedy of Louisiana asked directly whether he would be a "sock puppet" of the president, Warsh was unequivocal: "Absolutely not. The president nominated me, and I will act independently if confirmed."
On financial disclosures, Warsh acknowledged holding assets worth well over $100 million, much of it incompatible with Fed ethics rules. He said he had agreed to divest "virtually all" of his financial assets, the large majority before taking office and the rest within 90 days of being sworn in, going "above and beyond" what was required in order to help the Fed "re-establish its credibility." Democratic Senator Elizabeth Warren pressed him repeatedly on the details of those sales — what would be sold, to whom, and how it could be verified — and noted that without full disclosure, oversight was impossible. Warsh said he had shared all information he was permitted to share, to the satisfaction of the US Office of Government Ethics.
Warren also challenged Warsh on political independence, asking whether he believed Trump lost the 2020 election fairly. Warsh declined to answer directly, saying only that "this body certified that election many years ago" and that he intended to keep politics out of the Fed. The exchange underscored broader Democratic scepticism about his nomination. Meanwhile, Republican Senator Thom Tillis of North Carolina stated he would block the confirmation vote for as long as the Trump administration's criminal probe of current Fed chair Jerome Powell — related to cost overruns on a Fed building renovation — remains open, a position he said he would not move from.
On monetary policy, Warsh outlined a reform-minded vision: he said he was sceptical of forward guidance, the practice of signalling future rate decisions, and advocated a gradual reduction of the Fed's balance sheet and a more pragmatic approach to inflation data, which he called outdated. He described the post-pandemic inflation surge as "the greatest economic policy mistake in 40 or 50 years." Powell's term expires on 15 May, but analysts now doubt Warsh will be confirmed before that deadline given the obstacles from Tillis and the White House's continued support for the Powell investigation. If confirmation is delayed past July, it may not be completed until after the summer recess.