Sen. Elizabeth Warren worries Fed pick Kevin Warsh passed Trump's 'loyalty test'

Sen. Elizabeth Warren of Massachusetts is casting doubt on President Trump’s pick to lead the Federal Reserve, saying he's destined to put fealty to the White House above the central bank's independence.

Ms. Warren, the top Democrat on the Senate Banking Committee that will vet nominee Kevin Warsh, said Mr. Trump made it no secret that he wants to bend the Fed to his will.

“Donald Trump said anybody who disagrees with him will never be Fed Chair,” Ms. Warren wrote Friday on X. “Kevin Warsh — who cared more about helping Wall Street after the 2008 crash than millions of unemployed Americans — has apparently passed the loyalty test.”

Mr. Warsh is a former Fed governor who served from 2006 to 2011. He was a key liaison between the Fed and Wall Street during the financial crisis of 2008-09.

Once hawkish about lowering interest rates, fearing inflation, Mr. Warsh now agrees with Mr. Trump and says interest rates are too high. He said rates should drop to unleash economic growth.

Mr. Trump’s recent lobbying campaign to lower interest rates and constant criticism of Fed Chair Jerome Powell, whose term ends in May, made some senators uneasy.

Sen. Thom Tillis, North Carolina Republican, said he will block Mr. Warsh and any other Fed nominee until a Justice Department inquiry into Mr. Powell is resolved. 

Ms. Warren said all senators should be concerned about Mr. Trump’s pressure on the Fed, including his move to fire Fed Governor Lisa Cook over allegations of mortgage fraud.

“No Republican purporting to care about Fed independence should agree to move forward with this nomination until Trump drops his witch hunts of current Fed Chair Jerome Powell and Governor Lisa Cook,” Ms. Warren wrote.

Other senators praised the pick as uniquely qualified for the post.

“I have known Kevin for years, and his exemplary record speaks for itself,” Sen. Bill Hagerty, Tennessee Republican, said on social media. “No one is better suited to steer the Fed and refocus our central bank on its core statutory mandate.”

Canadian Prime Minister Mark Carney, a former central banker himself who is tussling with Mr. Trump over trade and other matters, called Mr. Warsh “a fantastic choice to lead the world’s most important central bank at this crucial time.”