Senate Banking Committee advances Kevin Warsh’s nomination for Fed chair

The Senate Banking Committee voted on Wednesday morning to advance the nomination of Kevin Warsh, President Trump’s pick to lead the Federal Reserve, bringing him a step closer to taking the helm of the central bank after Jerome Powell steps down as chair next month. 

Members of the congressional panel voted along partisan lines: 13 Republicans voted in favor of Warsh and 11 Democrats voted against. 

“Kevin Warsh’s leadership is absolutely essential now at the Federal Reserve than ever before,” Sen. Tim Scott of South Carolina, who chairs the Senate Banking Committee, said after the vote. “Frankly, his time as a former governor of the Federal Reserve during the crisis makes him battle-tested and ready to serve, and not only serve, but to lead.”

The nomination will now go to the Senate floor, where a simple majority is required to make Warsh the 17th chair of the Fed since 1913.

The Senate Banking Committee vote coincides with the central bank’s meeting on Wednesday, during which Fed officials are expected to keep the benchmark interest rate steady.

Warsh is widely expected to be confirmed and to succeed Powell, whose term as Fed chief ends May 15. That would allow Warsh to take over at the central bank’s June 16-17 meeting. 

Senator Thom Tillis, a Republican from North Carolina, earlier vowed to block Warsh’s nomination. He wanted the Justice Department to finish its investigation into Powell over the renovation of the Fed’s Washington, D.C., headquarters. Republicans have a slim majority on the Senate Banking Committee, so Tillis’s vote could delay Warsh’s confirmation. 

However, U.S. Attorney for the District of Columbia Jeanine Pirro announced on April 24 that her office would end the probe into Powell, and Tillis said he was prepared to advance Warsh’s nomination.

When Warsh testified before the Senate Banking Committee last week, he vowed to remain “strictly independent” in setting monetary policy. President Trump has repeatedly called on the central bank to cut rates, raising questions about the Fed’s ability to operate free of political influence.

“The president never asked me to predetermine, fix or decide on any interest rate decision, nor would I ever do so,” Warsh said in response to a lawmaker’s question on whether Mr. Trump has ever pressured him to commit to cutting interest rates.