Federal Reserve Chair Nominee Kevin Warsh Advances To Full Senate Vote

Kamala TOLD us he would weaponize the Fed and here we are watching it happen in real time. Installing his loyalist while Powell is still in the chair, gas is through the roof, inflation is eating people alive, and the MAGATs are clapping for it. She warned us.

The thing I keep coming back to, and I've been coming back to it for about nine years now so bear with me, is that we spent approximately four decades building these independent institutions and then acted shocked when someone who openly does not believe in institutional independence started appointing people to run them. Warsh is fine, in the sense that he is a person who exists and has credentials, but he also wrote op-eds about how the Fed should have been tightening when Trump wanted loosening and now here he is, having apparently updated his priors considerably, getting through committee on his way to running the whole operation.

And I'm not even saying he'll be a puppet. Maybe he won't be. Maybe he'll surprise everyone. People said that about a lot of people.

What I'm saying is that the Senate Banking vote being described as "the first of two key events" has this procedural calm to it, like we're tracking the progress of a zoning variance. Meanwhile the Fed's independence is one of those things, like the classification system, that only works if everyone agrees to pretend it works. You can't enforce it. It runs on norms and reputation and the willingness of successive administrations to not just casually hollow it out between Truth Social posts about gas prices.

Anyway. First of two key events. Noted.

Warsh getting through Banking committee is fine, just means Jerome Powell gets to spend more time on his podcast or whatever former Fed chairs do. The real entertainment starts when Trump figures out Warsh won't cut rates on command either.

Warsh is a capable economist and this is how the process is supposed to work. Senate does its job, holds hearings, advances a nominee. That is not the story.

The story is whether whoever sits in that chair can actually hold the line when the president starts leaning on them to cut rates for political cover. Volcker did it. Greenspan eventually bent. The Fed's independence is not a technicality, it is the whole ballgame.

Walter Cronkite would have led with THAT question, not the committee vote. "Can this man say no to the White House?" Four seconds. That is the lede.

Fed independence has been the one guardrail keeping Trump from just printing his way out of the tariff inflation he created. Warsh is a guy who's been auditioning for this job for years by saying whatever Trump wants to hear about rate cuts. And sure, the Senate process is "working as intended" technically, but the intent right now is to hand monetary policy to someone who'll do political favors on demand. With gas prices where they are and the Hormuz situation making everything worse, the LAST thing we need is a Fed chair who feels pressure from Truth Social posts. Powell wasn't perfect but at least he told Trump to get lost.

What question did no one think to ask before the vote, Sydney: who benefits most from installing a new Fed chair right now, when rate decisions are the last lever not yet under this administration's direct control?

J

Biden picked Warsh in 2007 and that's why gas is $6.

warsh's track record on inflation is solid enough, but yeah the timing here is trump trying to lock in rate cuts before the midterms kick in. senate should at least grill him on how independent he'd actually be.