Kevin Warsh’s nomination as the next Federal Reserve Chair is facing early resistance. Reports state that Senate Democrats on the Banking Committee have called for a pause in the process. They are demanding a delay until the ongoing investigations involving Fed officials Jerome Powell and Lisa Cook are resolved.
Kevin Warsh Nomination Under Pressure
According to a CNBC report today, Democrats on the Senate Banking Committee are urging Chair Tim Scott to pause the Kevin Warsh nomination to lead the Federal Reserve. The Democratic Senators, led by Elizabeth Warren, wrote to the Chair,
“We demand that you delay any nomination proceedings for Mr. Warsh until after the pretextual criminal investigations involving Chair Powell and Governor Cook have been closed.”
Notably, they want the Kevin Warsh nomination process to be delayed until two ongoing investigations involving Fed Chair Jerome Powell and Governor Lisa Cook are completed. Currently, both Fed officials are entangled in legal issues in separate cases.
The Department of Justice is reportedly probing possible criminal wrongdoing by Powell over cost overruns tied to renovations at the Fed’s headquarters. Addressing the investigation as “unprecedented,” Powell stated that it was triggered by President Trump’s opposition to the Fed’s monetary policies.
In a separate case, Governor Lisa Cook is allegedly involved in a mortgage fraud case. Although Trump had previously tried to remove Cook from her position, she is still serving as the governor.
Fed Independence at Risk, Democrats Warn
In the Democrats’ letter, they argue that the administration is using criminal investigation to undermine the Federal Reserve’s independence. They also criticized President Trump for solely selecting the next Fed chair. The letter read,
“The Administration’s apparent effort to seize control of the Fed through criminal prosecutions is dangerous and unprecedented. It would be absurd on its face to allow President Trump to handpick the next Chair of the Federal Reserve as his Department of Justice actively pursues criminal investigations of not one, but two sitting members of the Federal Reserve Board.”
It is worth noting that this development comes hot on the heels of Trump’s Fed Chair pick. As CoinGape reported recently, the president announced the nomination of Kevin Warsh as the next Fed Chair to replace Jerome Powell. While this development has largely been celebrated by the crypto industry, critics argue that the move could erode the Fed’s independence.
