A HOUSE DIVIDED
It is here that Warsh faces his third major challenge: divisions on the Fed’s rate-setting committee on the path forward.
At the last meeting, there was a rare outpouring of dissent, with three members declaring that the Fed should indicate a rate hike could be in the cards to combat inflation.
“One of Warsh’s challenges is that the Fed does seem divided – at times along partisan lines, which is a change from the past,” said Wessel.
Added to that another wrinkle: Powell will be the first outgoing chair in more than 70 years not to leave the board at the expiration of his term as its head.
US Treasury Secretary Bessent, who has criticised Powell’s decision to stay on, welcomed Warsh’s confirmation, saying he would “usher in a new day” at the Fed.
Most Democrats in the Senate opposed the confirmation, citing Trump’s threats to the central bank’s independence.
“Trump wants to control interest rates, and he nominated Kevin Warsh to be his sock puppet,” said Democratic Senator Elizabeth Warren.
At a Senate hearing, Warsh said he would “absolutely not” be the president’s puppet.
