Senate committee OKs Warsh as next Fed chair amid affordability crisis

The Senate Banking Committee advanced President Donald Trump's pick to lead the Federal Reserve on Wednesday, moving Kevin Warsh one step closer to the job as Americans grapple with soaring costs at the pump and elsewhere. The committee voted 13-11 along party lines, with North Carolina Republican Sen. Thom Tillis casting the deciding vote after the Trump administration agreed to drop an investigation of current Fed Chair Jerome Powell.

The vote marks a historic partisan divide. It was the first fully partisan vote on a Fed chair nominee in the committee's history, according to Massachusetts Democrat Elizabeth Warren. Warsh now advances to the full Senate, where a simple majority is required for confirmation. Republicans hold a 53-seat majority.

Warsh, a Hoover Institution fellow, previously served as a Federal Reserve governor from 2006 to 2011, when he helped navigate the 2008 financial crisis. Trump nominated him in January to succeed Powell, whose term expires May 15. The full Senate is likely to vote the week of May 11, potentially confirming Warsh before Powell steps down.

Democrats raised concerns that Warsh would be too deferential to Trump on interest rates. Warren called him a "uniquely unfit candidate," while Georgia Democrat Raphael Warnock expressed worry that "the Fed is on the side of the president's poll numbers or his political concerns" rather than working families. Warsh testified during his April 21 confirmation hearing that Trump never pressured him for rate cuts and that he would act independently.

The nomination comes as gas prices have climbed to $4.23 per gallon nationally—the highest since July 2022—driven partly by Middle East tensions. A recent Reuters/Ipsos poll found 61% of Americans think the economy is on the wrong track. While the Federal Reserve's inflation target is 2%, prices rose 3.3% over a year, driven largely by a 21% spike in fuel prices from February to March.

Democrats also noted Trump's attempt last year to fire Fed Governor Lisa Cook, appointed by former President Joe Biden. The U.S. Supreme Court is reviewing whether Trump exceeded his authority in that dismissal. Warren and Warnock raised questions about whether Warsh would resist pressure to remove Fed officials.

At his afternoon news conference, Powell said he would welcome Warsh and plan to "keep a low profile as a governor" after his term as chair ends. Powell indicated he would remain on the Fed's board of governors, a move that preserves institutional continuity but limits Trump's opportunity to appoint another board member.