New era at the Fed begins as Kevin Warsh confirmed as chair 

In a May 13 vote, the U.S. Senate confirmed Kevin Warsh to serve as the 17th chair of the Federal Reserve.

The former Fed governor will succeed Jerome Powell, who has led the central bank since 2018 and spent much of 2025 in the spotlight as a frequent target of President Donald Trump and many of Trump's political allies.

A (mostly) party-line vote: The Senate voted 54-45 to confirm Warsh, who was nominated by Trump in January. Sen. John Fetterman of Pennsylvania was the only Democrat to join Republicans in confirming Warsh, marking the most politically divisive Fed chair vote since the central bank's creation in 1913.

Earlier this week, the Senate voted 51-45 to confirm Warsh for a 14-year term on the Board of Governors. Warsh previously served on the board from February 2006 until April 2011.

GOP dubs Warsh an 'excellent choice': Trump "made an excellent choice in nominating Kevin Warsh to lead the Federal Reserve, and his confirmation today is an important step toward restoring confidence and credibility at our central bank," Senate Banking Committee Chairman Tim Scott said in a statement, adding that the Fed's decisions "touch every American household, from what families pay for groceries and housing to how far their paychecks go at the end of each month."

The South Carolina senator added that families in his state and across the U.S. "want lower costs, more opportunity, and a Fed that stays focused on its core mission of stable prices, maximum employment, and the American people, not politics."

Confirmation follows months of controversy: Warsh's name was first mentioned as a potential Fed chair candidate last summer. But his perceived loyalty to the president quickly became a concern among Democrats as Trump pressured Powell to lower short-term interest rates — and threatened to fire Powell if he did not.

Though Warsh was hawkish during his first go-around at the Fed, many of those who opposed his nomination have expressed uncertainty about whether he would act independently or cave to pressure from the White House.

The DOJ's recent investigation into Powell concerned politicians across both sides of the aisle, causing Warsh's nomination to stall in the Senate Banking Committee for months. It wasn't until the DOJ dropped its probe that the committee voted along party lines to advance the nomination.

How will the Fed act under new leadership? As chair, Warsh cannot unilaterally decide to cut or raise short-term interest rates. And while the central bank has been divided at its last few meetings, it has so far elected to hold rates steady this year following three consecutive rate cuts in the second half of 2025.

While Trump has repeatedly called for more cuts, some Fed officials have suggested that rising inflation and labor market uncertainty could actually lead to a rate hike.

If energy prices continue to rise amid the ongoing war in Iran, "I could envision a scenario in which some policy tightening is needed to ensure that inflation returns durably to 2 percent in a timely manner," Federal Reserve Bank of Boston President and CEO Susan Collins said during a May 13 speech at the Boston Economic Club. However, she noted that this scenario "is not in my most likely outlook."

What happens next: Warsh was confirmed for a four-year term as Fed chair. He will succeed Powell, whose last day in the role is May 15.

Powell, who was initially nominated to chair the Fed during Trump's first term in office and who can remain on the Board of Governors through January 2028, has said that he intends to stay at the Fed until he is satisfied that the DOJ's investigation is over. While the probe officially ended last month, federal officials have suggested that it could be revived.

The next Federal Open Market Committee meeting is scheduled for June 16-17. It will be the first time that the central bank makes a decision on rates with Warsh at the helm.