Senate Confirms Kevin Warsh to Federal Reserve Board in Step Toward Chairmanship

President Donald Trump's nominee to lead the Federal Reserve moved closer to the job after the Senate confirmed Kevin Warsh to the bank's Board of Governors Tuesday. Warsh served on the board nearly two decades ago. The Federal Reserve sets monetary policy and has clashed with Trump during his second term.

The confirmation vote marked the first step in Republican efforts to install Warsh as the next chair. Jerome Powell's term ends May 15. The full Senate is expected to confirm Warsh on Wednesday.

The process had been rocky for months, with legal fights and doubts about Trump's pick to succeed Powell. Senator Thom Tillis, Republican of North Carolina, had threatened to block the nomination until the Justice Department dropped its criminal probe into Powell. That investigation ended late last month after pressure from top Senate Republicans.

The probe centered on alleged mismanagement of renovation funds for the Federal Reserve's headquarters in Washington, D.C. It continued even as Powell prepared to leave the chair post. Some speculated the inquiry was retaliation because Powell resisted Trump's calls to cut interest rates sharply amid inflation and economic strains from the war in Iran.

Powell plans to remain on the Board of Governors after his term ends. He told reporters last month, "I plan to keep a low profile as a governor. There is only ever one chair of the Federal Reserve Board. When Kevin Warsh is confirmed and sworn in, he will be that chair."

During testimony before the Senate banking committee last month, Warsh called for the Fed to preserve its independence and avoid political and social matters. "The Fed must stay in its lane," he said. "Fed independence is placed at greatest risk when it strays into fiscal and social policies where it has neither authority nor expertise."

Warsh relied on full Republican support. Democrats criticized his finances and incomplete disclosures about his wife Jane Lauderer's wealth. They called him a "sock puppet" for Trump's economic agenda rather than an independent voice.