Washington (United States) (AFP) – The Trump administration wants Kevin Warsh in place as the new US central bank chair “as soon as possible,” with the existing Fed chief’s term coming soon to an end, Treasury Secretary Scott Bessent said Tuesday. Warsh, a former Federal Reserve official, is President Donald Trump’s choice to succeed Jerome Powell. But his confirmation in the Senate faces challenges as a key lawmaker pushes back against Trump’s attempt to control the independent institution.
Powell’s term as chairman expires in May, and Senate Banking Committee chairman Tim Scott told Fox Business earlier Tuesday that Warsh’s hearing is expected next week, with a vote due later on. “We want Kevin Warsh in as soon as possible,” Bessent told reporters on the sidelines of an Institute of International Finance event in Washington. The Fed and Powell are facing a Justice Department probe over renovation costs at its headquarters in Washington, sparking criticism of political pressure on the bank.
Republican Senator Thom Tillis — who sits on the Banking Committee — has vowed to block Warsh’s confirmation until the legal issue is resolved. “I think we’re going to let this play out,” Bessent said Tuesday. “There’s agreement for the hearings.” Bessent added that he believes Tillis is ultimately “a reasonable man.” Asked if he has been in talks to drop the Justice Department investigation, Bessent said: “I don’t control the DOJ probe.” But he maintained: “I am confident that (Warsh) will be the Fed chair.” Previously, a federal judge quashed subpoenas issued to the Fed as part of the Justice Department probe, with the court saying there was “a mountain of evidence” to suggest the investigation was a pressure tactic.
– Waiting for clarity –
Asked about the Fed’s path of interest rates as war in the Middle East plays out, Bessent added: “They could observe before they cut rates.” “I believe rates should be cut,” he maintained. But he added: “If they want to wait for some clarity, I understand that.” He added that Fed policymakers should also wait for Warsh to be in place “and let him lead the next cycle” of rate adjustments.
Trump has been pushing for the Fed to lower the benchmark lending rate since he returned to the White House in January 2025, and repeatedly lashed out at Powell for not slashing more aggressively. But US-Israeli strikes targeting Iran on February 28, which sparked Tehran’s retaliation and plunged the region into war, have triggered a surge in energy and fertilizer prices. Tehran has mostly blocked the Strait of Hormuz, a key waterway for such shipments. The move has caused gasoline and other price hikes in the United States, fanning fears of more persistent inflation. The Fed typically raises interest rates to rein in inflation and lowers them to spur economic activity.
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