By Maribel Velazquez
The Senate confirmed this Tuesday Kevin Warsh as a new member of the Board of Governors of the Federal Reserve, in a decision that strengthens the plans of donald trump to place him at the head of the US central bank.
The vote concluded with 51 votes in favor and 45 against, granting Warsh a 14-year term within the Federal Reserve. However, the Senate will still have to vote separately to ratify him as president of the body, a position currently held by Jerome Powellwhose period ends this week.
The confirmation occurs in the middle of months of political and financial tension in Washingtonmarked by Trump’s constant criticism of Powell over interest rate policy.
Trump seeks changes in interest rates
Over the past few months, Trump has publicly pushed for the Federal Reserve to cut interest rates more quickly, arguing that more flexible monetary policy would help boost the U.S. economy.
Even the president He even called Powell “stubborn” and “idiot” for refusing to apply more aggressive cuts.
Warsh, who was part of the Federal Reserve between 2006 and 2011 during the global financial crisis, has maintained critical positions towards some recent decisions of the central bankespecially on banking regulation and management of financial steadiness.
However, during his confirmation hearings he promised to maintain independence from the White House.
“President Trump never asked me to set or decide interest rates, nor would he ever do so,” Warsh declared before the Senate. “I will be an independent actor if my appointment as chairman of the Federal Reserve is confirmed.”
The economist also has experience in the private sector and is currently linked to the Hoover Institution, in addition to being a financial advisor to investor Stanley Druckenmiller.
Investigation into Powell marked the process
Warsh’s arrival also occurred in the midst of the controversy generated by a criminal investigation related to Powell statements before the Senate over the costly renovation of the Federal Reserve headquarters.
Although a judge dismissed the subpoenas on the grounds that they sought to pressure the official, the case raised questions among some Republican lawmakers about the future leadership of the central bank.
Finally, The investigation was closed last month by federal prosecutor Jeanine Pirroclearing the way for Warsh’s vote.
If confirmed as Fed chairman, Warsh would become one of the most influential economic figures in the new Trump administration and would have a key role in decisions on inflation, economic growth and interest rates.
Keep reading:
- Powell prepares visit to the Supreme Court over Trump’s dismissal of Fed governor
- Trump calls the chairman of the Federal Reserve a “cretin” and says that “that inept guy will be gone soon”
