Senators voted Wednesday to confirm Kevin Warsh as the next chairman of the Federal Reserve.
After a 54-45 vote in Washington, DC, Warsh will succeed Jerome Powell, who has led the Fed since 2018. Warsh’s appointment comes after being nominated by President Donald Trump, who has been critical of Powell and his reluctance to lower interest rates.
Warsh, in his confirmation hearings in DC earlier this year, said he would protect the independence of the Fed during his tenure. But Democrats have been critical of his closeness to Trump, as well as his expansive financial holdings, which make him the richest Fed chair in history.
As chair, Warsh will also serve in the Federal Open Market Committee, the body which helps set interest rate policy. The Fed uses higher interest rates to curb inflation, and lower rates to boost the labor market, in line with the central bank’s dual mandate of price stability and maximum employment.
Powell’s term as chair expires Friday. He has said he will remain at the Fed through 2028, an unusual move but one he said was sparked by Trump administration investigations of him.
What’s next for the Fed under Warsh
Warsh has advocated for aggressive interest rate cuts, but has also championed other ideas to fight inflation. That includes reducing the Fed’s massive balance sheet, which stands at more than $6.6 trillion in Treasury notes and mortgage-backed securities.
Still, upon his appointment, a number of Washington players weighed in with hopes for new direction at the Fed. In addition to lower interest rates, Trump and his allies want banking reforms and policy changes to counteract inflationary pressures weighing down the housing market.
“His commitment to disciplined monetary policy will help restore confidence in our economy and support long-term prosperity,” Rep. French Hill (R-Arkansas), chair of the House Committee on Financial Services, said in a statement.
Rep. Jason Smith (R-Missouri), chair of the House Ways and Means Committee, said Warsh is “someone who appreciates how high interest rates have held back our country’s economic potential.”
And, Mortgage Bankers Association CEO Bob Broeksmit reiterated support for changes to the Basel III framework that MBA hopes could promote mortgage activity.
“We look forward to continued engagement on policies affecting the banking and housing finance systems and will continue advocating for a more balanced and risk-aligned approach to capital standards affecting mortgage lending and commercial real estate finance,” Broeksmit said.
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Tristan Navera is a senior reporter on housing policy, covering trends and solutions in the housing market from Washington, DC. He was previously a senior reporter at Bloomberg Law, and before that covered real estate for the Washington Business Journal. Earlier in his career, he spent a decade reporting on business and real estate in Dayton and Columbus, OH. A Cincinnati native, he holds a journalism degree from Ohio University.
