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Bipartisan Senate Advances Warsh, Replacing Powell on Fed Board

5/12/2026

Summary

Senate Advances Warsh

The U.S. Senate voted 49-44 on Monday, John Fetterman (D-Pa.) and Chris Coons (D-Del.) crossing party lines and no Republican opposing, to advance Kevin Warsh’s nomination to Federal Reserve (Fed) Board.
Kevin Warsh pledged Fed independence, denied any rate-setting deal with President Donald Trump, who is urging lower interest rates.
Kevin Warsh will replace Fed Chair Jerome Powell, whose term ends May 15, after Senator Thom Tillis (R-N.C.) lifted his block.

Summary

Warsh Confirmation

Robert Edwards says Warsh’s confirmation will enable summer and fall rate cuts.
Thierry Wizman says high inflation expectations clash with a Federal Reserve to hold rates steady.
Lawrence Gillum calls Warsh’s style restraint rather than detailed forward guidance.
Warsh praised AI as American ingenuity giving the United States an edge while warning of risks, noting an EY survey finds half of global consumers use AI for savings and investment.

Summary

Warsh Blocked

Justice Department ended Fed renovation probe after a Republican senator threatened to block Warsh’s nomination.
Fed Chair Jerome Powell warned the Federal Reserve must turn to courts to shield monetary-policy decisions from political pressure.
U.S. President Donald Trump accused Jerome Powell of fraud over Fed-headquarters renovation cost overruns, prompting an investigation.
Warsh called the Fed’s leadership ‘broken’ in a Wall Street Journal op-ed, saying its reach exceeded its grasp.

Summary

Warsh Confirmation Odds

Market pricing gives a 0.7% chance of a May 14 Powell exit and a 29.5% chance of a May 15 exit.
Futures assign a 93.5% probability that Kevin Warsh will be confirmed as Federal Reserve (Fed) Chair by May 15, 2026.
Overall market consensus rates Warsh’s confirmation likelihood at 99.8% by that date.
Analysts warn that any procedural delay or unexpected opposition could quickly shift these probabilities and alter monetary-policy expectations.

History

Historical Context

In July 1979 President Jimmy Carter nominated Paul Volcker as Fed chairman, and after Senate confirmation he raised the federal-funds rate to a June 1981 peak of 20%, driving inflation from a 14.8% high in March 1980 to under 3% by 1983. The current Senate debate over Kevin Warsh echoes that 1979 clash, highlighting enduring tensions between lawmakers and the Federal Reserve over monetary independence.

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Senate Advances Warsh

The U.S. Senate voted 49-44 on Monday, John Fetterman (D-Pa.) and Chris Coons (D-Del.) crossing party lines and no Republican opposing, to advance Kevin Warsh’s nomination to Federal Reserve (Fed) Board.
Kevin Warsh pledged Fed independence, denied any rate-setting deal with President Donald Trump, who is urging lower interest rates.
Kevin Warsh will replace Fed Chair Jerome Powell, whose term ends May 15, after Senator Thom Tillis (R-N.C.) lifted his block.

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