Senate clears the way for Kevin Warsh to become Federal Reserve chair before Friday

"Kevin Warsh's path to becoming chair of the Federal Reserve is full of obstacles. On Monday, he cleared another hurdle in the Senate's complex procedural process. However, several steps remain before Warsh is officially appointed to replace Jerome Powell, whose term as chair ends on Friday. The Senate, where the Republicans hold the majority, is preparing to clear all of them this same week, before May 15, so that Warsh can take the helm of the Fed just in time for Powell's departure."

"The process began five months ago when, at the end of January, U.S. President Donald Trump proposed Warsh as a candidate to head the central bank, known as the guardian of the U.S. dollar. The Federal Reserve is an autonomous body, independent of the president. Its independence stems from the power granted to it by Congress, which must approve all its appointments. In other words, the president proposes candidates, but it is the Senate that must confirm them."

"Within weeks of Trump's announcement, the leaders of the Republican majority in the Senate submitted his nomination to the influential Banking Committee, the parliamentary body responsible for confirming the appointment. This committee has taken its time because the Republicans were unable to assemble a majority. Conservatives hold a narrow 13-11 majority on this committee. And Republican Senator Thom Tillis of North Carolina warned that he would vote against any Trump nominee as long as the Justice Department continued its criminal investigation into Powell."

"The Justice Department opened an investigation into Powell's testimony at a Senate hearing last summer regarding cost overruns on renovations to the Federal Reserve headquarters. But the investigation was widely seen to be part of the White House's campaign to coerce Powell into resigning or complying with its demands to lower interest rates more aggressively. So it wasn't until a couple of weeks ago, on April 29, when the prosecution dropped the investigation into Powell, th"

Kevin Warsh’s nomination to become Federal Reserve chair has cleared another Senate procedural hurdle, but additional steps are still required before he can be officially appointed to replace Jerome Powell when Powell’s term ends on Friday. The Senate plans to complete the remaining steps by May 15 so Warsh can take over immediately. The process began when President Donald Trump proposed Warsh in late January. The Federal Reserve’s independence means the president nominates candidates while the Senate confirms them through the Banking Committee. The committee delayed action because Republicans lacked a majority and because Senator Thom Tillis threatened to oppose any nominee while the Justice Department investigated Powell. The Justice Department dropped its investigation on April 29, removing a key obstacle.

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