Senate sets April 16 hearing for Warsh to replace Powell as Fed chair

The Senate Banking Committee set April 16, 2026 as the date for Kevin Warsh's confirmation hearing before the full Senate can vote on his nomination to become Federal Reserve chair. Powell's term as chair expires May 15, giving the Senate approximately four weeks to confirm Warsh before the chair position becomes vacant. Warsh was nominated by Trump on January 30 and the formal nomination was transmitted to the Senate on March 30.

Warsh, 56, served as a Fed governor from 2006 to 2011, appointed by President George W. Bush. He is a lawyer and investment professional who was a managing partner at Warsh Capital. The White House described Warsh as a believer in a "leaner Fed," an institution that does less regulatory work and focuses primarily on price stability. Sen. Elizabeth Warren of 🏛️Massachusetts, the ranking Democrat on the Banking Committee, called Warsh a "rubber stamp" for Trump's agenda and predicted he would cut rates whenever Trump demanded.

Sen. TTThom Tillis of 🌲North Carolina, a Republican, has placed a procedural hold on Warsh's confirmation. Tillis says he won't vote for Warsh until the Department of Justice drops a criminal investigation into Powell. The probe, opened in 2025 by the U.S. Attorney's office in 🏛️Washington, D.C., examines allegations that Powell misled Congress about the cost and scope of renovations to the Federal Reserve's headquarters. Powell has publicly called the investigation a politically motivated attempt to pressure him into cutting interest rates.

A criminal investigation of a sitting Fed chair is unprecedented in American history. Former Fed Chair Ben Bernanke called the probe an "extraordinary attack" on Fed independence. Tillis's position is unusual: he supports Warsh but refuses to help confirm him while the administration simultaneously uses criminal prosecution to pressure Powell. Treasury Secretary SBScott Bessent said the White House believes the Warsh hearing should proceed anyway.

Trump's pressure on the Fed has been the most sustained and direct in modern American history. Since taking office in January 2025, Trump has publicly demanded lower interest rates dozens of times, threatened to fire Powell at least three times, attempted to remove Fed Governor Lisa Cook (a Biden appointee) on legally uncertain grounds, and attempted to require the Fed to submit its proposed rules to White House Office of Management and Budget review under the same executive order that covers executive branch agencies.

The OMB rule-review attempt was the most technically significant challenge to Fed independence: if the Fed must submit its rules to the White House before they take effect, the president gains effective veto power over banking regulation. Fed Governor Michelle Bowman, a Trump appointee, acknowledged that the order could legally apply to the Fed but said the Fed had not yet submitted any rule in response. The White House had not publicly demanded compliance as of April 6.

In November 2025, Warsh published a Wall Street Journal op-ed praising the Trump administration's economic approach and calling for a rethinking of inflation "dogma" at the Fed. He argued that the Fed should unload much of its $6 trillion balance sheet, consisting mostly of Treasuries and mortgage-backed securities, because the holdings distort the bond market and encourage the government to run larger budget deficits. Warsh described this as making the Fed "leaner" and more focused on its core price-stability mandate.

Warsh's rate views are more complicated. He was known as an inflation hawk during his first stint as a Fed governor, when he pushed for earlier rate hikes after the 2008 financial crisis and disagreed with Chairman Ben Bernanke's policy of keeping rates low. Critics noted those positions would have slowed the economic recovery. By 2026, Warsh was arguing that AI-driven productivity gains meant the economy could sustain lower rates without triggering inflation. Democrats have argued this shift suggests he'll simply support whatever rate policy Trump prefers.

If confirmed, Warsh would succeed Powell at a moment of extraordinary economic stress. The U.S. economy faces simultaneously high oil prices from the Iran war Hormuz closure, a 10-month manufacturing job decline, slowing wage growth, and recession probability models ranging from 30% to 49%. The Federal Open Market Committee's next scheduled meeting is April 28. Fed governors who spoke publicly in late March signaled they wanted to hold rates steady given Iran war inflation risk and labor market uncertainty.

Warsh's confirmation would give Trump his first Fed chair since his original 2018 nomination of Powell, and a chair selected in part for his closeness to the administration. Democrats have argued that a Warsh-led Fed would cut rates to support Trump politically rather than based on economic data. Warsh's supporters argue he is a genuine inflation hawk who would resist political pressure. The April 16 hearing will be the first public test of which framing is accurate.

The Fed chair's legal protection against firing is unsettled following the 🏛️D.C. Circuit's December 2025 ruling that Congress cannot protect independent agency heads from presidential removal. The ruling applied to the NLRB and MSPB, but its logic, that agencies with broad executive power can't have removal protections under the Constitution's unitary executive theory, could apply to the Fed chair. The Supreme Court is expected to hear the case (likely Wilcox v. Trump) next term.

If the Supreme Court eliminates removal protections for the Fed chair, future presidents could fire Fed chairs at will for policy disagreements. Trump's current approach has been to use indirect pressure rather than an outright firing: the DOJ probe, the nomination of a successor, the OMB rule-review order. The April 16 Warsh hearing will likely produce the first on-the-record testimony from Trump's Fed pick about whether he believes the president can fire the Fed chair.

The Nixon-Burns precedent is the most direct historical analogue to the current Trump-Powell standoff. In 1971-1972, President Nixon repeatedly pressured Fed Chair Arthur Burns to keep interest rates low ahead of the 1972 presidential election. Burns complied. The result was an inflationary spiral that peaked above 12% annual inflation by 1974 and required years of painful tightening to correct. The experience directly shaped the consensus that Fed independence is essential to price stability.

The Fed's institutional structure (14-year governor terms, "for cause" removal protection) was strengthened after the Nixon-Burns episode specifically to insulate future Fed chairs from the same political pressure. Former Fed Chairs Bernanke, Greenspan, Yellen, and Volcker have all publicly cited the Nixon-Burns precedent as the primary historical justification for Fed independence. Trump's pressure campaign is the most direct challenge to that structure since Burns.