President Donald Trump’s pick for Fed chair Kevin Warsh was confirmed by the Senate on Wednesday in a 54-45 vote, the most divisive confirmation in the modern era — but that might not be enough for Trump, especially as the Iran war has sent prices soaring in the United States and inflation skyrocketing as economists expect interest rate cuts to be put off.
Warsh was the only Fed chair nominee in modern history to receive nearly zero bipartisan support, with Pennsylvania Democrat Sen. John Fetterman the sole Democrat to cross party lines to vote for him. That vote came the same day Fetterman cast the deciding vote against a war powers resolution to end Trump’s Iran war.
In an unusual break with tradition, outgoing chair Jerome Powell will remain on the Fed’s governing board after stepping down, determined, sources said, to safeguard the institution from political pressure.
“Those projections further pad the protective bubble that some Republicans have built around Warsh in recent weeks, giving him rhetorical runway to hold off on the cheaper borrowing costs that Trump has pushed for,” according to Semafor.
But that runway may be short-lived as Trump and Republicans face mounting pressure ahead of the midterm elections.
“Warsh’s honeymoon may not last long after senators cast their final votes to install him as chair,” according to Semafor.
“The president has ‘put this guy in for a firing squad,’” Access/Macro chief economist Tim Mahedy told Semafor. “It’s going to be brutal — Trump’s going to turn on [Warsh] in two months.”
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