Kevin Warsh Confirmed as New Federal Reserve Chair

President Donald Trump nominated Warsh after months of public clashes with Powell, whom Trump repeatedly accused of being incompetent for refusing to cut borrowing costs more aggressively. Confirmation was delayed when the Department of Justice opened a criminal investigation into the Fed, prompting Senator Thom Tillis to block a committee vote in protest; he relented only after a US attorney agreed to drop the inquiry. During his hearing, Warsh argued there was room to lower rates but vowed to exercise independent judgment, denying Senator Elizabeth Warren's charge that he would serve as the president's "sock puppet." Warren countered that he was "uniquely ill-suited" for the role and had been installed to do Trump's bidding.

Warsh inherits a difficult balancing act. The Labor Department reported that the cost of living rose 3.8% over the past year, the steepest annual increase in nearly three years, with food, housing and air-fare prices all climbing. Price pressures have intensified since the war with Iran disrupted tanker traffic through the Strait of Hormuz and pushed up crude-oil and gasoline costs. At the FOMC's April meeting, three members signalled that their next move could be a rate increase rather than a cut. Warsh has also called for broader reforms, including improvements to how the government measures inflation and how policymakers communicate with the public. One legal scholar told the BBC (British Broadcasting Corporation) that the new chair faces "Mission Impossible."