Breaking: Senate Committee Advances Kevin Warsh’s Nomination as Fed Chair Ahead of Fed Meeting

The Senate Banking Committee has advanced pro-crypto Kevin Warsh’s nomination to become the next Federal Reserve chair and will now head to the Senate floor for a final vote. This comes ahead of the Fed meeting today, where the FOMC is likely to hold rates steady in possibly Jerome Powell’s last meeting as Fed chair.

Kevin Warsh’s Fed Chair Nomination Heads To Senate Floor

The Senate Banking Committee voted 13-11 to advance Kevin Warsh’s nomination as the next Fed chair. The vote was notably along party lines, with Republicans voting to advance the nomination while Democrats voted against it, marking the first party-line vote for a Fed chair nomination in the committee’s history.

The nomination will now head to the Senate floor for a potential final vote when the Senate returns from its May recess. It is worth noting that Republicans were able to secure Republican Senator Thom Tillis’ vote after the DOJ dropped the probe into Jerome Powell last week.

However, Democrats such as Senator Elizabeth Warren, a ranking member of the Senate Banking Committee, remain unconvinced. Prior to the committee vote, Warren warned that a vote to advance Kevin Warsh’s nomination was a vote to help U.S. President Donald Trump take over the Fed. This comes despite Warsh vowing to maintain Fed independence if the Senate confirms him as the next Fed chair.

Meanwhile, the Senate Banking Committee’s vote to advance the Fed chair nomination comes ahead of today’s Fed meeting, which could be Powell’s last as Fed chair. Attention will be on Jerome Powell’s FOMC press conference today for hints on whether Powell will leave the Fed board when his term as Fed chair expires on May 15. This is significant as it could give Trump a majority on the Fed board as the president continues to push for more rate cuts.

On Course For Confirmation By May 15

Crypto traders are betting that the Senate will confirm Kevin Warsh as the next Fed chair by May 15, when Powell’s term expires. According to Polymarket data, there is currently a 92% chance of that happening.

It is worth noting that the Fed chair nominee has yet to provide insight into where he stands on interest rates and whether he will push for more rate cuts if the Senate confirms him. However, CME FedWatch data shows that the Fed is likely to hold rates steady throughout this year, even if Kevin Warsh succeeds Powell.

Goldman Sachs’ David Mericle also said that a Fed chair shift won’t accelerate rate cuts. He noted that a new chair may have limited influence if the FOMC remains divided and may be less inclined to lower rates than Powell is, especially amid the U.S.-Iran war and its impact on oil prices. However, the research analyst still expects the Fed to make two 25-basis-point (bps) cuts in September and December this year.