How the Fed chair succession saga could become a real mess
How the Fed Chair Succession Saga Could Become a Real Mess
The journey to appoint Kevin Warsh as the next Federal Reserve Chair has hit roadblocks, with the confirmation process showing signs of growing uncertainty. Trump’s selection of Warsh to replace Jerome Powell has yet to secure clear approval, despite the former chair’s term ending in less than a month.
Trump formally announced his choice on January 30, following a lengthy search that spanned over a month. However, the path to Warsh’s confirmation remains unclear. A key hurdle lies with the Senate Banking Committee, where Warsh’s hearing is scheduled for April 21. To move forward, the nomination must first pass this committee, which requires the support of North Carolina Senator Thom Tillis, a prominent Republican.
Tillis has set a condition: he will only vote for Warsh if the Justice Department halts its investigation into Powell. The inquiry focuses on testimony Powell gave last year regarding cost overruns during the renovation of the Fed’s Washington, DC, headquarters. Jeanine Pirro, the US Attorney leading the probe, has not relented, leaving the nomination in limbo.
Pro Tempore Role and Legal Threats
Should Warsh’s confirmation not materialize by May 15, Powell plans to step in as chair “pro tempore.” He emphasized that he intends to stay on the board until the investigation concludes with full transparency. However, Trump disputes this arrangement, threatening to remove Powell from his position if he assumes the interim role.
“I have no intention of leaving the board until the investigation is well and truly over with transparency and finality,” Powell stated.
This potential conflict could spark a new legal dispute between Trump and a Fed official. The Board of Governors typically allows the current chair to serve as a temporary replacement, but Trump’s stance challenges that tradition. The situation now risks becoming the most intricate Fed chair confirmation in the central bank’s modern history, unlike previous appointments of figures such as Janet Yellen, Ben Bernanke, and Alan Greenspan.
