U.S. Senate Votes to Confirm Wals as Federal Reserve Chairman

On Wednesday, the 13th Eastern Time, the U.S. Senate officially confirmed the appointment of former Federal Reserve Governor Kevin Warsh as the new Federal Reserve Chairman through a full chamber vote. Although the confirmation by the Senate was anticipated, those supporting Warsh held only a slim majority in the voting. This reflects not only the polarization in Congress but also the concerns of Democrats that Warsh might comply with President Trump's request for rapid interest rate cuts.

The voting results for Warsh's nomination for the position of Federal Reserve Chairman were almost entirely along party lines, with the nomination receiving votes in favor from 54 senators, only 9 more than the 45 votes against. Among the supporters, all 53 were Republican senators, and in the Democratic camp, only Senator John Fetterman from Pennsylvania defected.

According to media statistics, looking at the above voting results, since 1977 when the U.S. Congress required that the nomination of the Federal Reserve Chairman must be confirmed by the Senate, this is the "smallest margin" confirmation vote among all previous chairs. In contrast to Warsh, the previous nominations for Federal Reserve Chairman were confirmed by the Senate with a significant advantage.

The current Federal Reserve Chairman, Powell, has won at least 80 votes in favor in the Senate during his two terms. Powell's predecessor, Yellen, received a 56-票 favorable vote with only 26 opposing votes in 2014, when many senators were absent due to bad weather.

Powell's term as Federal Reserve Chairman ends this Friday, May 15th. After the Senate confirmation, Warsh will officially take the baton on May 14th, starting his four-year term as chairman. Warsh has already received the Senate's confirmation for a 14-year appointment as a Federal Reserve Governor in this Tuesday's vote this week.

Earlier on Wednesday, before the announcement of the Senate vote results, Timiraos also pointed out that on Wednesday, the market strongly hinted that the interest rate reduction cycle in 2024-2025 has ended. He mentioned a market performance: the yield on two-year U.S. Treasury bonds rose to a high not seen since June of last Wednesday, and the Federal Reserve policy rate in June last year was 75 basis points higher than it is now.

Media has pointed out that an increasing number of Federal Reserve officials believe that the central bank should clearly indicate that the direction of the next interest rate adjustment could be either an increase or a decrease. This means that if Warsh attempts to promote an interest rate cut that other officials view as unfounded, he will face strong resistance.

Taking Office Under the Shadow of "Politicization": Unprecedented Controversy Over Federal Reserve Independence

The confirmation process for Warsh is particularly attention-grabbing, not just because of the close voting results, but also because it takes place against a backdrop of escalating controversy surrounding the politicization of U.S. monetary policy.

Over the past few months, President Trump has continued to publicly put pressure on the Federal Reserve to lower interest rates, criticizing Powell for being "too slow to act" and frequently suggesting that the Federal Reserve should align more closely with the White House's economic agenda. During the confirmation hearings related to Warsh's nomination, Democratic senators focused on questioning: whether Warsh can truly maintain the independence of the Federal Reserve.

In response to the questioning, Warsh did not make any policy commitments to Trump, stating he will not be a puppet of Trump and promising to uphold the independence of the monetary policy of the Federal Reserve.

However, the market generally believes that after Warsh takes office, the relationship between the Federal Reserve and the White House will enter a more sensitive phase.

It is worth noting that although Powell will step down as the Chairman of the Federal Reserve, he still plans to retain his position as a Federal Reserve Governor, which means that for a period in the future, there may be two different styles and policy philosophies within the Federal Reserve.

Warsh: From Hawkish to Moderate

Kevin Warsh, now 56 years old, is not exactly a "parachute" appointment.

He served as a Federal Reserve Governor from 2006 to 2011 and was one of the youngest members at the time,