Kevin Warsh confirmed as Federal Reserve chair

The Senate on Wednesday voted to confirm Kevin Warsh to succeed Jerome Powell as the next chairman of the Federal Reserve, setting the stage for new leadership at the powerful central bank, which faces pivotal decisions ahead on monetary policy.

Centrist Sen. John Fetterman (D-Pa.) was the only Democrat to vote for Warsh, who previously served on the Federal Reserve's board of governors from 2006 to 2011. The vote was 54-45.

Every Republican voted to confirm Warsh, whose nomination was held up after Sen. Thom Tillis (R-N.C.) put a hold on all of President Trump's nominees to the Fed to protest the Justice Department's criminal probe of Powell related to his congressional testimony about the renovation of the Fed's headquarters in Washington.

Sen. Kirsten Gillibrand (D-N.Y.) missed the vote.

The Senate confirmed Warsh only two days before Powell's term as chairman is scheduled to expire on Friday.

Powell, who has clashed with Trump over lowering interest rates, says he will remain on the board of governors until his term in that role expires at the end of January 2028.

Warsh, who is 55, developed a reputation as an inflation hawk during his time on the Fed under Presidents George W. Bush and Barack Obama.

He played a key role in developing the Fed's response to the 2008 financial crisis and previously served as a special assistant to the president for economic policy under Bush before joining the bank.

Democrats questioned Warsh's willingness to stand up to Trump if he became chair but Warsh testified to the Senate Banking Committee that he would take his responsibility to be an independent leader "very seriously."

He also pushed back on speculation that he had agreed with Trump privately to cut rates in exchange for being nominated, telling senators that he did not "make a deal."

Warsh, a graduate of Stanford University and Harvard Law School, who worked closely with legendary investor Stanley Druckenmiller after leaving the Fed, has assets worth more than $100 million, something that became a point of contention at his confirmation hearing.

Sen. Elizabeth Warren (D-Mass.) pressed him about possible ethical conflicts posed by his investments but Warsh told lawmakers that he had worked "tirelessly with the Office of Government Ethics" to ensure he was in compliance with ethics rules.

Warsh will now have the tricky job of leading a Fed where opinions among the board of governors are divided over cutting rates at a time of rising inflation.

The central bank kept interest rates steady last month but the final meeting of the board under Powell's leadership was marked by internal dissent.

The Federal Open Market Committee (FOMC) voted 8-4 not to change the benchmark funds rate, with four members dissenting. It was the highest level of dissent since the early 1990s.

Trump had pressed Powell hard to cut rates significantly but with little success, leading Trump to criticize Powell frequently over his leadership and economic acumen.

Warsh has said he wants to reform how the Fed measures inflation by replacing its preferred inflation marker with a trimmed-mean Personal Consumption Expenditures (PCE) gauge. That would likely have the Fed consider lower inflation readings into its deliberations on whether to cut rates.

The consumer price index (CPI) rose 0.6 percent in April, representing a 3.8 percent increase over the past 12 months, according to the Labor Department.

Updated at 3:47 p.m.