Trump’s Federal Reserve nominee Kevin Warsh spent more than two hours before the Senate Banking Committee on Tuesday, April 21, fielding sharp questions about his independence from a White House that has publicly called for dramatic interest rate cuts, with South Carolina’s Senator Tim Scott presiding as committee chair.
Warsh, 56, was nominated by President Donald Trump in January to succeed Jerome Powell, whose term expires in May. The nomination quickly became a flashpoint over whether the nation’s central bank can remain shielded from political pressure. Throughout the hearing, Warsh pushed back on skeptics who argued that Trump’s public statements previewing rate cuts had effectively telegraphed a pre-arranged agreement with his nominee.
Senator Elizabeth Warren, the committee’s ranking Democrat, opened by accusing Warsh of being uniquely ill-suited for the chairmanship and argued his confirmation would hand the president effective control over monetary policy. Warren characterized the prospect as a path toward corruption and potential economic disaster, contending that Warsh would provide financial assistance to Wall Street allies while leaving everyday Americans behind. She also raised concerns about undisclosed financial holdings, pressing Warsh over whether any of his assets were tied to entities linked to convicted sex offender Jeffrey Epstein. Warsh said he had cooperated fully with the Office of Government Ethics and agreed to divest substantially all of his financial assets — estimated between $135 million and $226 million — before taking any oath of office.
Senator John Kennedy of Louisiana drew laughter when he asked Warsh to define the phrase “sock puppet” — a reference to Warren’s characterization — then mimicked a hand puppet before asking whether Warsh would serve as the president’s human sock puppet. Warsh replied flatly that he would not, and stated that if confirmed as chairman he would act independently.
The question of a presidential deal on rates was a recurring theme. Multiple senators pressed Warsh on whether Trump had conditioned his nomination on a commitment to lower interest rates. Warsh testified before the Senate Banking Committee that the president had not asked him to predetermine or commit to any rate decision in their conversations, and that he would not have agreed to such a condition. He acknowledged that Trump had publicly expressed confidence that rates would fall when Warsh was installed at the Fed, but said that remark did not reflect any private understanding between them.
Beyond the politics, Warsh used the hearing to sketch an ambitious reform agenda he has described as a “regime change” at the Fed. He criticized the central bank’s 2020 move to flexible average inflation targeting — a framework that allowed inflation to temporarily exceed 2 percent — and said he favors a strict return to a 2 percent target. He also argued the Fed made a fatal error in 2022 by allowing post-pandemic inflation to take hold, and said the institution has not fully resolved the consequences of that misstep. Bureau of Labor Statistics data has shown consumer prices have remained above the Fed’s 2 percent target for five consecutive years, with cumulative price increases approaching 25 percent since 2021. Warsh also called for eliminating forward guidance and the Fed’s quarterly dot-plot rate projections, reducing the central bank’s $6.7 trillion balance sheet, and closing the door on a central bank digital currency.
A potential wrinkle in the confirmation timeline emerged when Republican Senator Thom Tillis of North Carolina announced he would withhold his vote until the Department of Justice closes its investigation into Powell’s handling of a renovation project at the Fed’s Washington headquarters. Because the Senate Banking Committee has 13 Republicans and 11 Democrats, Tillis’s opposition would produce a 12-to-12 deadlock, stalling the nomination before it reaches the full Senate floor.
Senator Tim Scott, the South Carolina Republican who chairs the Banking Committee, opened the hearing by noting that the Federal Reserve carries a dual mandate to foster price stability and ensure maximum employment, and said Warsh’s track record equips him to restore the institution’s credibility. Scott, who also serves on the Senate Finance Committee, presided over Tuesday’s proceedings as senators from both parties took their allotted five minutes to question the nominee. Representative William Timmons, who represents the Spartanburg-Greenville district in Congress and serves on the House Financial Services Committee, had not issued a statement on the Warsh nomination as of publication time.
The Senate has not yet scheduled a committee vote on Warsh’s confirmation.
