Washington (United States) (AFP) – US President Donald Trump’s choice for central bank chair is set to face a confirmation hearing next Tuesday, in a nomination some have criticized as an attempt to take over the Federal Reserve. The Senate Banking Committee released the April 21 date on Tuesday, after weeks of delays in former Fed official Kevin Warsh’s confirmation process. Trump picked Warsh to succeed Jerome Powell when his term at the helm ends in May, but his confirmation in the Senate faces challenges as a key lawmaker pushes back against the president’s attempt to control the independent institution.
Republican Senator Thom Tillis — who sits on the Banking Committee — has vowed to block all Fed nominees, including Warsh, until a Justice Department probe into Powell and the Fed over renovations at the bank is resolved. Elizabeth Warren, the top Democrat on the committee, said in a statement Tuesday: “There should be no hearing or vote in the Senate on Kevin Warsh’s nomination while the President continues his attempt to take over the Fed.” Calling Warsh a “Trump sock puppet,” she added that his confirmation by the Senate “would be a mistake.” The Republican-led panel is expected to quiz Warsh at his April 21 appearance on his vast wealth and his past ties to notorious sex offender Jeffrey Epstein, as well as his views on interest rates and other economic issues.
– ‘As soon as possible’ – The Trump administration wants Warsh in place as the new Fed chairman “as soon as possible,” US Treasury Secretary Scott Bessent told reporters at a roundtable Tuesday. On Tillis’ plan to block the confirmation process until the Justice Department probe is resolved, Bessent added: “I think we’re going to let this play out.” Bessent stated that he believes Tillis is ultimately “a reasonable man,” speaking on the sidelines of an Institute of International Finance event in Washington.
Asked if he has been in talks to drop the Justice Department investigation, Bessent added: “I don’t control the DOJ probe.” But he maintained: “I am confident that (Warsh) will be the Fed chair.” Previously, a federal judge quashed subpoenas issued to the Fed as part of the Justice Department probe, with the court saying there was “a mountain of evidence” to suggest the investigation was a pressure tactic.
– Waiting for clarity – Asked about the Fed’s path on interest rates as war in the Middle East plays out, Bessent added: “They could observe before they cut rates.” “I believe rates should be cut,” he maintained. But he added: “If they want to wait for some clarity, I understand that.” He indicated that Fed policymakers should also wait for Warsh to be in place “and let him lead the next cycle” of rate adjustments.
Trump has been pushing for the Fed to lower the benchmark lending rate since he returned to the White House in January 2025, and repeatedly lashed out at Powell for not slashing more aggressively. However, US-Israeli strikes targeting Iran on February 28, which sparked Tehran’s retaliation and plunged the region into war, have triggered a surge in energy and fertilizer prices. Tehran has mostly blocked the Strait of Hormuz, a key waterway for such shipments. This move has caused gasoline and other price hikes in the United States, fanning fears of more persistent inflation. The Fed typically raises interest rates to rein in inflation and lowers them to spur economic activity.
© 2024 AFP
