Senate Confirms Kevin Warsh as New Fed Chair

The Senate voted 54–45 to confirm his four-year term as the 17th Fed chair.

Published: 5/13/2026, 4:53:50 PM EDT

Senate Confirms Kevin Warsh as New Fed Chair — Kevin Warsh, President Donald Trump's nominee for Chair of the Federal Reserve, is sworn in to testify during his Senate Committee on Banking, Housing, and Urban Affairs confirmation hearing in the Dirksen Senate Office Building in Washington on April 21, 2026. (Andrew Harnik/Getty Images)

Kevin Warsh will officially become the new head of the Federal Reserve.

The Senate voted 54–45 on May 13 to confirm Warsh’s four-year term as the 17th Fed chair.

This comes a day after the upper chamber approved Warsh’s 14-year term on the central bank’s Board of Governors. He previously served on the board from 2006 to 2011.

Warsh’s ascent to chairman was one of the most partisan votes in the institution’s century-long history.

Sen. John Fetterman (D-Pa.) was the lone Democrat to vote for President Donald Trump’s pick. Other Democratic lawmakers had expressed reluctance to support Warsh’s nomination.

Prior to the floor vote, Sen. Elizabeth Warren (D-Mass.), the ranking member of the Senate Banking Committee, said Warsh could erode the Fed’s independence.

“As soon as Donald Trump became president a second time, Mr. Warsh began shouting from the rooftops that the Fed should cut interest rates. In exchange for abandoning his principles, the President offered Mr. Warsh his dream job,” Warren said.

But Warsh has reaffirmed his commitment to central bank independence, arguing that he would prefer to see the Fed return to the dual mandate of stable prices and maximum employment rather than engage in mission creep.

He also assured lawmakers that Trump never asked him to lower interest rates.

Ultimately, Warsh said, it is up to the Fed to remain independent.

“The Fed must stay in its lane,” Warsh told the committee. “Fed independence is placed at greatest risk when it strays into fiscal and social policies where it has neither authority nor expertise.”

At the same time, Warsh noted, Fed independence is not threatened when elected officials provide their opinions on monetary policy.

‘Regime Change’ of Policy and Personnel

Warsh, 56, has regularly advocated for a “regime change” of policy and personnel at the Fed.

Citing its track record over the past few years, he believes various changes are needed to restore its credibility and public trust. While he has yet to offer an official list of reforms, Warsh has alluded to different routes the institution could take moving forward.

One main issue is interest rates.

“My broad view is that interest rates need to be forward-looking,” he said.

In the past, he has supported lowering rates amid what he sees as a disinflationary climate from the artificial intelligence (AI) boom.

This could be a challenge for the incoming chairman as he grapples with brewing inflationary pressures and mixed employment conditions.

“As for policy, he enters at a time where inflation is rising, the labor market is concerned about the impact of AI and a potential spike in unemployment and three voting members have dissented about using easing language in their most recent remarks,” Jay Woods, chief global strategist at Freedom Capital Markets, told The Epoch Times in a note.

“For a Chair that wants to lower rates, he sure has his work cut out for him.”

With 11 other voting members, Warsh would need to convince several of his colleagues, including outgoing chair Jerome Powell, to loosen policy constraints.

Powell has said he plans to maintain a low profile as a governor.

“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,” Powell told reporters last month.

Investors do not expect any rate actions this year, and many traders are gradually pricing in a rate hike next year.

Warsh has also championed using less of the balance sheet.

Since the global financial crisis, the central bank has purchased Treasury and mortgage-backed securities to cushion economic blows and bring down rates. He has stated that this go-to quantitative easing tool for the Fed has benefited Wall Street but distorted financial markets.

Economists warn that by trimming its holdings, the Fed would risk rising long-term yields. However, Warsh believes this could be offset by reducing the policy rate.

Warsh has also indicated that he would apply more focus on trimmed average or mean inflation. This measure would eliminate wild month-to-month swings, whether it be eggs or airfares.

“The measures I prefer are looking at things that are called trimmed averages,” Warsh told lawmakers. “We take out all of the tail-risks, all of the one-off items, and we ask ourselves whether the generalized change in prices is having second-order effects on the economy.”

The oil price shock emanating from the war in Iran—nearing its 12th week—has caused headline inflation to balloon.

April’s annual consumer inflation rate popped to 3.8 percent, the highest in almost three years. This was fueled almost entirely by energy prices. Additionally, the March Personal Consumption Expenditures (PCE) Price Index—the Fed’s preferred inflation measurement—rose to 3.5 percent.

Using the trimmed 12-month PCE inflation rate, calculated by the Dallas Fed, the reading would be 2.4 percent.

Meanwhile, Warsh has also suggested changes to the Fed’s communication, particularly regarding forward guidance. This tool, introduced by Alan Greenspan, is designed to shape expectations for the path of monetary policy, effectively allowing markets to adjust to future conditions.

“The Fed tells the whole world what their forecasts are going to be,” Warsh said. “Well, the Fed’s human, and then they hold on to those forecasts longer than they should.”

This could also mean changes to the number of post-meeting press conferences and the Summary of Economic Projections—a quarterly update on the Fed’s expectations for policy and the economy.

Warsh will lead his first meeting next month when the Federal Open Market Committee convenes the June 16–17 policy gathering.