The Senate Banking Committee voted along strict party lines on Wednesday to advance the nomination of Kevin Warsh as the next chair of the Federal Reserve. This step puts Warsh in position to potentially replace current chair Jerome Powell, who has frequently faced criticism from Donald Trump, particularly over the central bank’s handling of interest rates.
The committee approved Warsh’s nomination by a 13–11 vote, with all Republican members supporting him and all Democrats opposing the decision. Warsh, who previously served in a senior role at the Federal Reserve, has been outspoken in his criticism of the institution in recent years, especially under Powell’s leadership. He has argued that the surge in inflation to 9.1% in 2022 represented one of the most significant policy failures by the central bank in roughly four decades.
Although the nomination has cleared the committee stage, a full Senate vote is not expected until next month. However, it remains possible that Warsh could be confirmed before Powell’s current term as chair is set to expire on May 15, according to reporting from the Associated Press.
This committee vote marked one of two major developments involving Federal Reserve leadership during the week. On the same day, Powell presided over what could be his final meeting of the Fed’s rate-setting body as chair. During a press conference later that afternoon, he indicated that he may take the unusual step of remaining on the Federal Reserve’s Board of Governors even after his term as chair concludes. Such a move would be highly uncommon and would limit Trump’s ability to appoint a new member to the board immediately.
Powell’s potential decision drew sharp criticism from Scott Bessent, who addressed the issue during an interview on Fox Business with Larry Kudlow. Bessent argued that it would be atypical for a departing Fed chair to remain on the board, especially given Powell’s frequent emphasis on institutional norms. He suggested that staying on could be seen as contradicting those principles.
Bessent further expressed strong support for Warsh, stating that his leadership would usher in a new era at the Federal Reserve, emphasizing accountability, improved management, and more disciplined policymaking. Meanwhile, Tim Scott, who chairs the Senate Banking Committee, praised Warsh as “battle-tested” and underscored the importance of shifting away from what he described as the economic policies of the Biden administration, often referred to by critics as “Bidenomics.”
The committee’s vote coincided with the Federal Reserve’s latest decision to keep interest rates unchanged at 3.6%, once again going against Trump’s repeated calls for rate cuts. The disagreement highlights ongoing tensions between the White House and the central bank over monetary policy direction.
Separately, a legal dispute involving the Federal Reserve has added another layer of controversy. In March, James Boasberg blocked an effort by the Justice Department to issue grand jury subpoenas targeting the Federal Reserve Board. In a newly unsealed ruling, Boasberg concluded that prosecutors had not provided sufficient evidence to suggest that Powell had committed any wrongdoing.
Boasberg wrote that the subpoenas appeared to serve an improper purpose, suggesting they were intended to pressure Powell either to lower interest rates in line with the president’s preferences or to step down from his position. He stated that there was substantial evidence indicating that the primary goal of the subpoenas was to harass or coerce Powell rather than to pursue a legitimate criminal investigation.
The legal conflict stems from an inquiry launched earlier this year by Jeanine Pirro. The investigation focused on Powell’s June 2025 testimony before the Senate Banking Committee, during which he addressed issues related to a long-running renovation project at the Federal Reserve’s headquarters in Washington, D.C. Powell revealed the existence of the investigation in January and characterized it as an attempt to undermine the independence of the central bank.
In response to Boasberg’s ruling, Pirro announced that the Justice Department plans to appeal the decision. She criticized the judge’s actions, arguing that the ruling improperly interfered with the legal process and prevented prosecutors from carrying out their responsibilities. Pirro described the decision as an example of judicial overreach, maintaining that the investigation should be allowed to proceed without obstruction.
