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President Donald Trump’s nomination of Kevin Warsh to lead the Federal Reserve has stalled in the Senate as lawmakers from both parties demand a delay until the Justice Department closes investigations into current Fed Chair Jerome Powell and Governor Lisa Cook.
The bipartisan opposition, led by Senate Banking Committee Democrats and including at least one Republican, threatens to derail Warsh’s confirmation ahead of Powell’s May 2026 term expiration, raising questions about the central bank’s leadership transition and independence from political pressure.
The process to confirm Warsh has stalled, with Senate Democrats formally requesting a delay in the nomination proceedings until ongoing investigations into current Fed Chair Jerome Powell and Fed Governor Lisa Cook are resolved.
In a sharply worded letter to Republican committee leadership, top Democrats argued that the timing of the nomination amid politically charged enquiries risks undermining the Fed’s independence.
“The nomination comes after months of repeated efforts by the administration to influence the Fed by intimidation, including by opening criminal investigations into Fed Governor Lisa Cook and Fed Chair Jerome Powell.”
The Democrats wrote in their appeal, led by Senate Banking Committee ranking member Sen Elizabeth Warren (D-Mass.)
Warren and her colleagues demanded that the proceedings for Mr Warsh’s nomination be delayed until after the pretextual criminal investigations involving Chair Powell and Governor Cook have been closed
The controversy intertwines policy preferences with questions about institutional autonomy. Warsh’s nomination comes during an intense battle over the Federal Reserve’s role and direction.
Trump has publicly criticised Powell for resisting pressure to cut interest rates more aggressively, a stance many in financial markets see as key to risk assets, including cryptocurrencies.
At the heart of the dispute are Department of Justice investigations into Powell and Cook. Powell, who still serves on the Fed’s Board of Governors, is being probed over cost overruns tied to the Federal Reserve headquarters renovation, a matter he and allies call politically motivated.
Cook is contesting a separate mortgage-fraud-related inquiry that has reached the U.S. Supreme Court.
“These enquiries are part of an attempt by the administration to exert improper control over the U.S. central bank’s monetary policy decisions.”
Powell said in a statement, framing the legal actions as a strategy to influence policy outcomes rather than genuine criminal probes.
Republican support for Warsh has also fractured. Sen. Thom Tillis (R-N.C.), a key member of the Senate Banking Committee, has vowed to block Warsh’s advancement until the investigations are resolved, a stance that could deadlock the committee and effectively stall the nomination.
The standoff signals uncertainty over the Fed’s future policy orientation. Warsh’s record as a Fed governor and his reputation as a monetary hawk have sparked debate over how a Fed led by him might balance inflation control with growth objectives.
Although Trump and White House officials have defended Warsh’s credentials, with a White House spokesperson calling his academic and professional record unimpeachable.
If Warsh’s nomination remains deadlocked in committee, it could delay or derail confirmation altogether, keeping markets and policymakers in limbo months before Powell’s term ends.
With Republicans holding a slender majority on the banking committee, the outcome now hinges on whether bipartisan consensus can be forged, a prospect that remains uncertain as investigations and ideological divides deepen.
The clash over Warsh’s nomination goes beyond a single appointment; it reflects concerns about political influence on independent institutions.
Lawmakers on both sides argue that the Fed’s credibility, whether on interest rates, inflation, or its role in overseeing financial stability, depends on perceptions of autonomy from partisan agendas.
As the Senate gears up for hearings, Warsh’s fate will test not just his qualifications but the resilience of U.S. institutions amid heightened political polarisation.
