The Senate confirmed Kevin Warsh to the Board of Governors Tuesday, checking off a crucial step in naming him the new chairman of the Federal Reserve.
The Senate voted 51-45 in favor of confirming Warsh to a 14-year term as one of the Fed’s seven governors. He’s replacing Stephen Miran, who took on the role to fill a vacancy created by an early resignation.
Miran’s term expired in January, but he was allowed to remain on the board until his successor was confirmed.
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Clearing the way to replace Powell
Confirmation hearings aren’t over for Warsh yet. The Senate still needs to vote separately to confirm Warsh as the replacement for Fed Chair Jerome Powell.
Powell’s term is set to expire this month, but he and President Donald Trump have clashed on policies in the past year, with Powell resisting the Trump administration’s demands to cut interest rates.
Warsh faced questioning from lawmakers earlier this month, with Democratic lawmakers questioning his independence from the White House and Trump.
Warsh addressed those concerns in his opening statement, saying “monetary policy independence is essential.”
“I do not believe independence in monetary policy is threatened when elected officials state their views on rates,” he added.
Who is Kevin Warsh?
Warsh became the youngest-ever Fed governor when President George W. Bush nominated him in 2006.
Prior to serving on the board, Warsh worked in mergers and acquisitions at Morgan Stanley & Co. in New York, where he focused on financial strategy.
Later, he was special assistant to the president for economic policy and served as executive secretary of the National Economic Council under Bush.
In those positions, he advised the president and administration on issues related to capital markets, securities, banking and insurance.
Although he has previously favored keeping interest rates higher to prevent inflation, he has recently aligned with Trump, criticizing the current Fed board and calling for aggressive rate cuts. He blamed the central bank for not responding more quickly to skyrocketing inflation during the COVID-19 pandemic.
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