U.S. Senate Confirms Kevin Warsh to Lead the Federal Reserve

The U.S. Senate on Tuesday confirmed President Donald Trump's nominee Kevin Warsh as the next chair of the Federal Reserve, installing new leadership as inflation remains elevated and oil prices climb on Middle East tensions. Warsh, 56, a former Fed official, was approved 54–45 in a largely party-line vote. He will replace Jerome Powell. Inflation has stayed above the Fed's 2% goal for several years. In April, the inflation rate rose to 3.8%. The report cited energy supply disruptions tied to the war in Iran as a driver of higher gasoline prices, adding that shipping interruptions through the Strait of Hormuz have been a key factor behind the recent rise in oil prices. Policy divisions inside the Fed are also sharpening. The central bank has kept rates unchanged for three straight meetings. At last month's meeting, three officials objected to keeping dovish language in the statement, arguing for more neutral wording to retain the option of future rate increases—a rare split described as the clearest in more than three decades. Another policymaker, Stephen Milan, continued to back rate cuts. The report said Warsh will take Milan's seat, potentially reshaping voting dynamics and internal negotiations. Questions about the Fed's independence have resurfaced as Trump renews pressure on the central bank. Trump has repeatedly criticized Powell for not cutting rates sooner. White House National Economic Council Director Kevin Hassett recently said markets welcomed Powell's appointment because he "will help interest rates decline over time," drawing fresh attention to concerns about political influence. At his confirmation hearing, Democratic Sen. Elizabeth Warren warned Warsh could become Trump's "mouthpiece." Warsh said he would act independently and denied facing pressure from Trump to lower rates. Warsh's finances have also drawn scrutiny. He previously criticized the Fed's performance during the 2021–2022 inflation surge and urged the central bank to scale back external communications, arguing that tools such as quarterly rate projections can reduce flexibility when conditions shift. Democrats also challenged the lack of detail in his financial disclosures. The report said Warsh holds at least $100 million in assets, including investments linked to Polymarket and SpaceX, without specifying position sizes. He pledged to divest the relevant holdings within 90 days of being sworn in. Separately, the report said a judicial investigation involving Powell had previously complicated Warsh's nomination; the probe was dismissed in April. Powell has said he intends to remain on the Fed's Board of Governors after stepping down as chair. His term as a governor runs through January 2028.