Trump Formally Nominates Kevin Warsh as Fed Chair While DOJ Powell Probe Stalls Senate Confirmations
President Trump has formally transmitted Kevin Warsh’s nomination to the Senate to replace Jerome Powell when his term ends May 15, 2026 — also naming him to a 14‑year Fed governorship — positioning a rate‑cut‑friendly, AI‑optimistic former Bush‑era Fed governor who favors a smaller balance sheet. The confirmation is likely to stall as Sen. Thom Tillis has vowed to block all Fed nominees until the DOJ’s criminal probe into Powell’s testimony about a $2.5 billion Fed renovation is resolved, a standoff intensified by heated Senate hearings, Treasury Secretary Scott Bessent’s refusal to rule out presidential legal retaliation, and the Fed’s effort to quash DOJ subpoenas.
📌 Key Facts
- President Trump formally transmitted Kevin Warsh’s nomination to the Senate on March 4, 2026 to replace Jerome Powell as Federal Reserve chair when Powell’s term ends May 15, 2026; Warsh was also nominated for a new 14‑year term as a Fed governor to occupy the seat held by Stephen Miran.
- Warsh is a former Morgan Stanley banker and Bush‑era Fed governor, now a Hoover Institution fellow; he is popular in GOP circles and described by allies as rate‑cut friendly, favoring 1–2 cuts this year, a significantly smaller Fed balance sheet (via asset sales), and ‘strong’ but growth‑compatible regulation.
- Warsh and his supporters argue AI‑driven productivity gains justify lower interest rates and faster growth with limited inflationary risk—an assessment many Fed officials publicly dispute.
- Senate opposition threatens to stall the nomination: retiring Sen. Thom Tillis has vowed to block any Fed confirmations (chair or board) until the DOJ criminal investigation into Jerome Powell’s testimony about a $2.5 billion Fed headquarters renovation is resolved; other Republicans including Sen. Kevin Cramer have criticized the probe.
- The DOJ has subpoenaed Jerome Powell over his June 2025 Senate testimony on the renovation; the Federal Reserve is contesting those subpoenas in sealed court proceedings and has asked a judge to quash them.
- Treasury Secretary Scott Bessent’s testimony that it would be ‘up to the president’ whether to sue a Fed chair over rate decisions—and his refusal to promise Warsh would be protected from legal action—triggered sharp exchanges with senators (including Elizabeth Warren) and reinforced concerns about political pressure on the Fed.
- Policy context: after three quarter‑point cuts in late 2025, economists expect the FOMC to hold the federal funds rate around 3.5%–3.75% at its Jan. 28, 2026 meeting (Powell held a 2:30 p.m. ET press conference after the decision); Fed officials remain divided on further easing (12 of 19 in December backed at least one more cut), and former Fed staff say the DOJ probe and political attacks have not changed how the FOMC conducts its internal economic deliberations.
📊 Analysis & Commentary (1)
What Are Kevin Warsh’s Plans for the Fed?
"The City Journal piece is a critical, sympathetic deep‑dive on Kevin Warsh’s likely priorities as Fed chair—chiefly an uncompromising focus on price stability, rolling back "mission creep," and reshaping bank regulation and Fed institutional practices—while warning that his vision would be a substantial departure from recent Fed norms and may face steep political and practical limits."
📰 Source Timeline (14)
Follow how coverage of this story developed over time
March 05, 2026
12:28 AM
White House formally nominates Kevin Warsh to be next Federal Reserve chair
New information:
- PBS / AP confirms the White House has now formally sent Warsh’s nomination to the Senate, specifying that the transmission occurred Wednesday, March 4, 2026.
- Provides an on-record quote of Sen. Thom Tillis' stated posture: he will oppose confirming Warsh until the criminal investigation into Jerome Powell is resolved, and he is willing to let the nomination be blocked in committee.
- Reiterates that Powell publicly disclosed on Jan. 11 that DOJ subpoenaed the Fed over his June Senate testimony on a $2.5 billion building renovation project, underscoring the nexus between that probe and the Warsh confirmation fight.
- Clarifies Warsh’s recent economic stance: he has harshly criticized the Fed’s post‑pandemic low‑rate policy as causing the 2021–22 inflation spike, yet is now aligned with Trump in calling for rate cuts on the theory that AI‑driven productivity will allow lower rates without stoking inflation.
- Notes that many Fed officials disagree with Warsh’s view that AI productivity gains justify rate cuts at this stage.
March 04, 2026
8:19 PM
Trump officially nominates Kevin Warsh as Fed chair to replace Jerome Powell
New information:
- President Trump has formally submitted Kevin Warsh’s nomination to the Senate to replace Jerome Powell as Federal Reserve chair when Powell’s term ends May 15, 2026.
- Warsh is also being put forward for a fresh 14‑year term as a Fed governor, occupying the board seat currently held by Trump‑nominated rate‑cut advocate Stephen Miran, whose term expired in January but who is serving until a successor is confirmed.
- Retiring Sen. Thom Tillis, a key Republican on the 13–11 Senate Banking Committee, has vowed to block any Fed nomination while the DOJ’s criminal investigation into Powell’s testimony about the $2.5 billion Fed headquarters renovation is ongoing, and Sen. Kevin Cramer has joined him in condemning the probe as Trump‑driven intimidation.
- The piece fleshes out Warsh’s profile: former Morgan Stanley banker, Bush‑era Fed governor, and currently a visiting fellow at Stanford’s Hoover Institution, described as rate‑cut friendly and popular in GOP circles.
8:18 PM
White House formally nominates Warsh to be Federal Reserve chair
New information:
- Confirms that Warsh’s nomination, first announced Jan. 30, has now been formally transmitted from the White House to the Senate.
- Clarifies that Jerome Powell’s term ends in two months and that Warsh would succeed him at that point if confirmed.
- Restates Sen. Thom Tillis’s position that he will vote to block Warsh in Banking Committee until the Powell criminal probe is resolved, highlighting the risk the nomination will not clear committee.
- Adds Warsh’s recent public argument that AI-driven productivity gains will allow faster economic growth with lower inflation, which he cites to justify cutting interest rates, and notes that 'many Fed officials' disagree.
February 27, 2026
2:34 AM
Federal Reserve seeking to quash subpoenas in DOJ investigation, source says
New information:
- The Federal Reserve is actively challenging the DOJ grand jury subpoenas to Jerome Powell in sealed court proceedings and has asked a federal judge to quash them, according to a source familiar with the effort.
- The challenge is proceeding behind closed doors because of grand jury secrecy rules, and the specific legal arguments the Fed is using have not been disclosed.
- CBS confirms that the subpoenas stem from Powell’s June 2025 Senate Banking Committee testimony about cost overruns in a multi‑year renovation of the Fed’s office buildings, which the Trump administration had attacked as 'ostentatious' and potentially unlawful.
February 13, 2026
9:27 PM
Tillis suggests Warsh faces long fed chair nomination process
New information:
- Tillis tells CBS that Kevin Warsh 'is going to have to decide' whether he wants to proceed with the nomination given the restrictions on his business activities once formally nominated and the likelihood of a protracted process.
- He reiterates on Face the Nation that he has 'no intention' of supporting any Fed nominee, including Warsh, until DOJ resolves its criminal investigation into Jerome Powell.
- Tillis sharply criticizes D.C. U.S. Attorney Jeanine Pirro, calling her pursuit of Powell an effort by a 'young U.S. attorney with a dream' to get the president’s attention and 'not cute.'
- Pirro responds that her office repeatedly contacted the Fed about renovation cost overruns and Powell’s testimony before resorting to subpoenas, and insists the word 'indictment' came only from Powell, not prosecutors.
- Senate Banking Chair Tim Scott is quoted saying Powell made a 'gross error in judgment' and was not well prepared for his hearing but that he does not believe Powell committed a crime.
- Tillis argues that, absent a referral from Senate Banking members, DOJ should heed seven Republican senators who say they do not think Powell acted with criminal intent.
4:16 PM
Tillis says he has "no intention" of backing any Fed nominees until DOJ's Powell probe is resolved
New information:
- Sen. Thom Tillis told CBS’s 'Face the Nation' he has 'no intention of supporting any confirmation of any Fed board member, chair or otherwise' until DOJ’s investigation of Fed Chair Jerome Powell is resolved.
- Tillis framed his stance as a categorical blockade, not limited to the Fed chair but covering all Federal Reserve Board nominees.
- The comment comes in a nationally aired interview, signaling an on‑the‑record hardening of Senate resistance that could stall Trump’s Fed picks beyond the already contentious Warsh nomination.
February 05, 2026
8:30 PM
WATCH: Bessent tells Senate panel it would be president's choice of whether to sue fed chair over interest rates
New information:
- On Feb. 5, 2026, under questioning from Sen. Elizabeth Warren, Treasury Secretary Scott Bessent testified that it would be 'up to the president' whether to sue Fed‑chair nominee Kevin Warsh if he did not lower interest rates.
- Bessent declined to give Warren a commitment that Warsh would not be sued or investigated by DOJ over rates, saying Trump’s Alfalfa Club threat to sue was a joke while still conceding such a lawsuit would be the president’s decision.
- Sen. Thom Tillis said Bessent’s willingness even to 'stipulate' that suing Warsh was possible was 'troubling' and reaffirmed he will not vote to advance Warsh while DOJ’s criminal investigation of current Fed Chair Jerome Powell remains unresolved.
- Banking Committee Chair Sen. Tim Scott added that 'ineptness or being incompetent is not a criminal act,' breaking with the administration’s posture on the Powell probe.
- The article confirms this was Bessent’s second straight day of Capitol Hill grilling on the Financial Stability Oversight Council’s annual report, following a House hearing that devolved into personal insults.
6:48 PM
Warren and Bessent erupt into shouting match over Trump's Warsh joke
New information:
- At a Feb. 5 Senate Banking hearing, Sen. Elizabeth Warren asked Treasury Secretary Scott Bessent to commit that Fed‑chair nominee Kevin Warsh would not be sued or investigated by DOJ if he failed to cut interest rates as Trump wants; Bessent responded, 'That’s up to the president,' refusing to give such assurances.
- Bessent acknowledged Trump’s 'I’ll sue him' remarks about Warsh were a 'joke,' and said Trump had also joked about Warren, drawing laughter, but still would not pledge there would be no legal retaliation tied to rate decisions.
- Bessent tried to pivot by accusing Warren of having previously held up Jerome Powell’s nomination, and used the exchange to reiterate that Warsh is 'highly qualified' while sidestepping direct commitments on DOJ independence.
February 02, 2026
3:44 PM
Trump advisor rips Powell for 'out of control' interest rates as feud over Warsh nomination heats up
New information:
- Trump economic adviser Kevin Hassett told Fox News that high mortgage rates and rents are the 'number one affordability problem' and result from Joe Biden and Fed Chair Jerome Powell letting rates get 'out of control.'
- Hassett argued the Fed should focus on keeping interest rates and unemployment low while slimming its balance sheet, and should do so 'quietly' in a more traditional central-banking style.
- He publicly pushed back on Sen. Thom Tillis’ call to end the DOJ’s criminal investigation into whether Powell misled Congress about a $2.5 billion Fed building renovation, saying the Fed had been 'forthcoming' with investigators and that the probe, and political reaction to it, are 'way out of the norm of Federal Reserve policy.'
February 01, 2026
6:43 PM
Ex-Trump economic adviser says Kevin Warsh will "take the Fed back" to norms
New information:
- Former Trump NEC director Gary Cohn publicly backs Kevin Warsh, calling him 'very highly qualified' and saying he will 'take the Fed back to its traditional' norms.
- Cohn outlines Warsh’s likely policy stance: backing 1–2 rate cuts this year, favoring a significantly smaller Fed balance sheet via asset sales, and supporting 'strong' but growth‑compatible regulation.
- The article underscores that Warsh’s confirmation will be an 'uphill battle' because Sen. Thom Tillis has vowed to oppose all Fed nominees until the DOJ’s criminal investigation of Jerome Powell is resolved, directly linking the nomination to that probe.
January 28, 2026
5:17 AM
Federal Reserve may keep rates unchanged for months as economy shows signs of health
New information:
- Confirms that after three cuts last year, Fed officials are again expected to leave their short‑term rate unchanged at this week’s meeting.
- Adds detail that only 12 of 19 FOMC participants in December backed at least one more cut this year, underscoring internal division over further easing.
- Notes economists’ consensus that any additional cuts are likely to come later in the year, around June or afterward.
- Reports Powell has given just one speech touching on the economy since September, and cites former Fed officials saying his public role has visibly shrunk amid political pressure.
- Quotes former New York Fed and BNY/ Guggenheim analysts saying the recent DOJ subpoenas and Supreme Court signals may actually have strengthened Senate support for Fed independence.
January 27, 2026
11:03 PM
WATCH LIVE: Fed chair Powell holds news conference on interest rate decision
New information:
- Confirms Powell will hold a live news conference on Wednesday, Jan. 28, 2026 at 2:30 p.m. ET following the FOMC decision.
- Restates that the committee is 'almost certain' to keep the policy rate unchanged around 3.6% after three quarter‑point cuts in late 2025, emphasizing the Fed’s "well positioned to wait" stance.
- Adds fresh on‑record assessments from former Fed staffers Claudia Sahm and Michael Gapen that the DOJ and political attacks will not change how the FOMC conducts its internal economic deliberations.
4:57 PM
Here's what to expect at the Fed's first interest rate meeting of 2026
New information:
- Economists polled by FactSet expect the FOMC to hold the federal funds rate at 3.5%–3.75% at its January 28, 2026 meeting, after three consecutive cuts in late 2025.
- CBS specifies the announcement schedule: rate decision at 2 p.m. ET on January 28 followed by a 2:30 p.m. Powell press conference expected to last about 45 minutes.
- The article ties current Fed deliberations to a weakening labor market and inflation still above the 2% target, framing why officials are likely to pause cuts.
- It reiterates that the DOJ probe into Powell’s handling of the Fed’s headquarters renovation and the Supreme Court case over Lisa Cook’s removal are unfolding just as Trump prepares to name Powell’s successor when his term expires in May.
- Consumer context: borrowing costs have already eased somewhat since last year’s cuts, but a single 0.25‑point move would have limited immediate effect; analysts note rates on many loans are at multi‑year lows even as affordability remains strained.
January 17, 2026