Key events
Jerome Powell’s term as chair ends on 15 May. He said last month that he would remain as chair until a successor is named.
Powell also is serving a separate term as a member of the Fed’s governing board that lasts until January 2028.
Fed chairs typically leave the board when their terms as chairs ends, but Powell also said last month he would remain on the board, even if a new chair is approved, until the investigation is dropped.
When asked about Powell’s comments, Trump said he would fire Powell if he tried to stay at the Fed.
Yet Trump’s previous attempt to remove a Fed governor, Lisa Cook, has been tied up in courts.
During oral arguments in January, a majority of justices on the Supreme Court appeared to lean towards letting Cook keep her job.
While the long-delayed hearing is a necessary step for Kevin Warsh, it’s not clear when the committee may even be able to vote on his nomination.
The Justice Department is investigating Powell and the Fed over a building renovation, and senator Thom Tillis, a North Carolina Republican, has said he would effectively block Warsh until the probe is dropped, AP reported.
“Clearly there’s a majority of the committee that’s not going to move this nomination forward, especially while this sham of a criminal investigation is going on,” senator Tina Smith, a Democrat from Minnesota, told reporters on a conference call Monday.
“It feels a bit like we’re going through the motions when we really have not addressed the fundamental challenges that this nomination has.”
The turmoil could make a potential transition from Powell to Warsh an unusually turbulent one for the world’s most important central bank, which has typically seen smooth transfers of power.
Should the change in leadership prove difficult, it could unnerve markets and lift longer-term interest rates.
Trump’s Federal Reserve chair pick to face lawmakers at key confirmation hearing
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President Donald Trump’s choice to lead the Federal Reserve will commit to protecting central bank independence on interest rates at a crucial confirmation hearing later today.
“I am committed to ensuring that the conduct of monetary policy remains strictly independent,” Kevin Warsh is to say in an opening statement to the Senate Banking Committee. He is also expected to express commitment to fighting inflation, according to remarks seen by the AFP news agency.
The hearing, scheduled for 10am ET, will be closely watched as it marks a key hurdle Warsh must overcome in order to succeed Fed chair Jerome Powell when his term ends on 15 May.
But the session will be tense, with all 11 Democrats on the Banking Committee last week urging for a delay in the nomination’s proceedings until separate investigations into Powell and Fed governor Lisa Cook are closed.
Republican senator Thom Tillis, who sits on the panel led by his party, has also vowed to block all Fed nominees – including Warsh – until the Justice Department probe involving Powell is resolved. With 13 Republican members on the committee, Tillis’ vote against Warsh’s confirmation could be enough to set up an impasse.
Warsh is due to face questioning from lawmakers on issues ranging from his wealth to past connections with the late sex offender Jeffrey Epstein, alongside his views on economic issues.
In other developments:
Lori Chavez-DeRemer, Donald Trump’s labor secretary, resigned from her role with the administration. She said it was “an honor and a privilege to serve” to serve and that she would take on a job in the private sector. The departure came after she became entangled in a string of political and personal controversies. Democrats celebrated, writing “this administration is imploding”.
Chuck Schumer, the Senate minority leader, called for Kash Patel’s immediate resignation following a report from the Atlantic detailing the FBI director’s alleged excessive drinking and absences. Patel has sued the magazine for defamation with his attorneys calling the article a “sweeping, malicious, and defamatory hit piece”.
Donald Trump signed memorandums related to coal supply chains, natural gas and grid infrastructure on Monday. The president invoked the Defense Production Act in the energy-related memos, writing that increasing energy production is “essential to United States national defense”.
The crowded field of Democratic candidates in the California’s governor’s race appears to be narrowing as Betty Yee — a former state controller— announced Monday she planned to end her campaign. Meanwhile, the California Democratic party chair Rusty Hicks continued to urge candidates trailing in the polls to exit the race.
