The U.S. Senate has approved Kevin Warsh's confirmation as chair of the Federal Reserve. Warsh is expected to assume the post immediately around Nov. 15, when current Chair Jerome Powell steps down.
The Senate passed Warsh's confirmation as Fed chair in a 54-45 vote during a plenary session on Thursday, local time. The chamber had approved his nomination as a Fed governor the previous day, on Nov. 12. Fed governors serve 14-year terms, while the chair serves a four-year term.
The change marks the first transition in the Fed's top job in eight years, since Powell took office on Feb. 5, 2018. Once sworn in, Warsh is expected to preside over the Federal Open Market Committee (FOMC) meeting scheduled for Nov. 16-17.
U.S. President Donald Trump nominated Warsh as the next Fed chair on Jan. 30 this year, pinning his hopes on interest rate cuts. Warsh's nomination cleared the Senate Banking Committee on Oct. 29. At a press conference held the same day immediately after the FOMC's regular meeting, Powell said, "I will continue to serve as a governor for some time after my term as chair ends," adding, "I will not leave the board until the investigation (by the U.S. Department of Justice into the Fed and myself) is concluded transparently, finally and completely." Powell's term as a governor runs until Jan. 31, 2028.
The Fed that Warsh will lead is facing its deepest level of division in history, strained by Trump's attempts to intervene and by war in the Middle East. At last month's FOMC meeting, four of the 12 voting members dissented — the largest number of dissents since October 1992, 34 years ago. Governor Stephen Miran again opposed holding rates steady, arguing for a 0.25 percentage point cut, while Dallas Fed President Lorie Logan, Cleveland Fed President Beth Hammack and Minneapolis Fed President Neel Kashkari supported the hold but broke with the statement language hinting at possible rate cuts. All three officials who strongly opposed rate cuts joined this year's FOMC as voting members. If Powell, who has a bitter relationship with Trump, remains at the Fed while Miran departs, Warsh's policy dilemma will only deepen.
