Fed Chair Nominee Warsh Denies Pressure to ‘Predetermine’ Interest Rate Cuts

Kevin Warsh, President Donald Trump’s nominee to lead the Federal Reserve, pledged repeatedly Tuesday to act independently from political pressure, but declined to offer clear guidance on interest rates during a contentious Senate committee hearing.

Facing pointed questions from Democrats on the Senate Committee on Banking, Housing and Urban Affairs, Warsh said Trump “never asked” him to commit to specific monetary policy decisions and insisted he would not “predetermine” rate actions if confirmed. At the same time, lawmakers pressed him on whether he could resist Trump’s public demands for lower borrowing costs.

Next Steps at the Fed

Warsh’s testimony underscored the tension of his nomination: can he balance White House expectations with the Federal Reserve’s tradition of independence? Trump has repeatedly called for the Fed to cut rates and previously insisted he would replace current Chair Jerome Powell with someone more willing to commit to rate cuts.

Trump appointed Powell in 2017 to a four-year term that began in 2018. Former President Joe Biden nominated him for a second term in 2022. That term expires in May, and Powell has said he will stay in the role if Warsh is not confirmed by the Senate before that time.

The Fed cut interest rates three times in 2025 but left the federal funds rate unchanged at 3.5% to 3.75% at its last meeting in March. The next Fed meeting is scheduled for April 28 and 29.

The hearing comes at a politically charged moment for the Fed and the broader economy, with inflation still a concern for many Americans and Trump openly urging rate cuts. Warsh, a former Fed governor known for hawkish views on inflation, argued before the Banking Committee that the central bank needs a “new framework” to address price pressures that surged after the pandemic, even as he acknowledged inflation has eased from its peak.

Inflation has remained greater than the Fed’s 2% target, with the most recent Personal Consumption Expenditures Price Index, the Fed’s preferred inflation gauge, sitting at 2.8% in February. Many economists expect the impact of the U.S.-Iran conflict to cause inflation to increase, especially energy prices, with greater effects if the conflict drags on.

Partisan Questioning

At the confirmation hearing, Democrats repeatedly challenged Warsh’s ability to remain independent of political pressure. Some warned Warsh against being a “sock puppet” for the president. In response, Warsh said he would be a “strictly independent” actor and emphasized that no commitments had been made to Trump regarding policy decisions.

Still, his reluctance to provide specifics—on interest rates, the Fed’s balance sheet or communication strategy—left lawmakers and investors with limited clarity on how he would steer monetary policy. Warsh also sidestepped several politically sensitive questions, including whether Trump lost the 2020 election.

Complicating matters further, Warsh’s path to confirmation remains uncertain. Senator Thom Tillis, R-North Carolina, has vowed to block a vote of the full Senate to confirm any Fed nominee until a Department of Justice investigation into Powell is dropped or resolved, raising the possibility that Warsh may not be confirmed before Powell’s term expires on May 15. During the hearing, Tillis mostly praised Warsh, including defending him against Democrats seeking clarity on the roughly $100 million in personal assets he has agreed to divest if he is confirmed.

Tillis, however, made clear during the hearing that he wants the DOJ investigation dropped.

It is unclear if Trump will cancel the probe against Powell, whose term as a member of the Federal Reserve Board of Governors ends in 2028. Powell has said he intends to serve the full term, despite Trump’s opposition.