US Senate Confirms Kevin Warsh as Next Fed Chair

The US Senate has confirmed Kevin Warsh as the next chair of the Federal Reserve, clearing the way for him to succeed Jerome Powell when Powell’s term ends later this week.

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Lawmakers approved Warsh on Wednesday in a 54–45 vote. Democratic Senator John Fetterman of Pennsylvania was the only member of his party to support the nomination.

The confirmation follows weeks of political tension surrounding a criminal investigation into Powell that had stalled progress on Warsh’s nomination.

Probe into Powell Dropped

The Department of Justice moved last month to drop its criminal investigation into Powell, which had focused on alleged false testimony to Congress related to an office renovation project at the central bank.

Powell has consistently rejected the allegations, describing the probe as a politically motivated attempt to influence the Federal Reserve’s decisions on interest rates.

Following the Justice Department’s decision, Washington US Attorney Jeaninne Pirro said the matter would instead be reviewed by the Federal Reserve’s inspector general.

The investigation had complicated Warsh’s path to confirmation. Several senators from both parties had previously blocked the nomination in the Senate Banking Committee while the inquiry remained active.

Republican Senator Thom Tillis of North Carolina, who had vowed to oppose Warsh while the probe was ongoing, changed his position after the Justice Department dropped the case. Tillis later supported advancing the nomination in committee, helping send it to a full Senate vote.

Powell to Remain on Fed Board

Powell’s four-year term as Federal Reserve chair ends on Friday. However, he has said he intends to remain a member of the central bank’s Board of Governors while the inspector general’s investigation continues.

Speaking at a press conference in Washington last month, Powell said he would stay in place until the inquiry had been completed with full transparency.

He also warned that legal challenges targeting the central bank could undermine its ability to conduct monetary policy independently of political pressure.

Powell’s term as a member of the board runs until 2028, allowing him to continue participating in decisions on US interest rates and monetary policy even after stepping down as chair.

Warsh Takes Helm Amid Economic Pressures

Warsh, a former Federal Reserve governor, will begin a four-year term as chair. He is currently a fellow at the Hoover Institution, a conservative think tank based at Stanford University.

During his earlier tenure at the Fed in the late 2000s and early 2010s, Warsh was widely viewed as an advocate of higher interest rates, arguing they were necessary to keep inflation low and stable.

More recently, however, he has expressed support for lower borrowing costs and criticised the central bank’s warnings that tariffs introduced last year could push inflation higher.

Warsh assumes leadership of the Fed at a time of renewed inflation pressures. US government data released on Tuesday showed prices rising for a second consecutive month as the ongoing US-Israeli war with Iran pushed gasoline costs higher.

According to the US Bureau of Labor Statistics, annual inflation has climbed to its highest level in three years.

Interest Rate Outlook

The Federal Reserve has kept interest rates unchanged at its past three policy meetings in 2026. Prior to that, the central bank lowered rates by a quarter of a percentage point at three consecutive meetings.

Any move to raise rates could increase borrowing costs for households and businesses, potentially slowing economic growth.

Financial markets currently expect a roughly 60% chance that interest rates will remain unchanged for the rest of the year, according to the CME FedWatch Tool. The probability of a rate increase by year’s end stands at about 30%.

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Adapted by ASEAN Now. Source 14 May 2026