|
Getting your Trinity Audio player ready...
|
Kevin Warsh, a lawyer and academic with deep Stanford University connections, was confirmed by the Senate on Wednesday to become the next chair of the Federal Reserve.
Warsh, who has been a fellow at Stanford University’s Hoover Institute since 2011, was confirmed by the Senate in a 55-45 vote. He was nominated by President Donald Trump in January.
Warsh has strong ties to Stanford. Besides working at the Hoover Institution, he has also lectured in Stanford’s Graduate School of Business. He graduated from Stanford in 1992 with a degree in public policy, where he met his wife, Jane Lauder. Lauder is a former executive of the cosmetics company Estée Lauder Companies and is an heiress to the company, which was started by her grandmother. She has served on Stanford’s Board of Trustees since January 2025.
Warsh served as a member of the Board of Governors of the Federal Reserve System from 2006 until 2011. He succeeds Jerome Powell, who has served as the Fed’s leader chair since 2018. Powell was nominated to the chair position by Trump, beating out Warsh for the position at the time, but Powell has repeatedly faced personal attacks and pressure from the president for the Fed’s decision not to lower interest rates.
Fed independence has been a key issue for years, including both prior to and during Warsh’s nomination. The Federal Reserve system is an independent agency designed to operate without political pressure from Congress or the president. In addition to Trump’s vocal criticism, Powell became the subject of a federal criminal investigation in January regarding the renovation of the Fed’s headquarters in Washington, D.C., which was more costly than projected. The probe was dropped in late April, but federal prosecutors have said they could revive the investigation. In a public statement from January, Powell described the investigation as a tactic of intimidation and political pressure.
After months of speculation, Powell recently announced that he would stay on as a governor, a Fed policymaker. He can stay in the position until January 2028. It will put Warsh in the unusual position of leading the Fed while his predecessor, who is widely respected, continues to vote on monetary policy decisions.
Warsh will take the helm of the Fed at a time of economic uncertainty. The Fed has a dual mandate of ensuring that inflation remains steady around 2% – a goal called price stability – and maximum employment. Inflation has remained stubbornly higher than the Fed’s target in recent years. Most recently, the Consumer Price Index, a measure of inflation, ticked up to 3.8% in April, a worrisome sign that inflation could be gaining steam again following the Iran war.
Warsh will assume the role of Fed chair on May 14 and is expected to lead the Federal Open Market Committee meeting, where policymakers make monetary policy decisions, on June 16 and 17.
