Quick overview

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Kevin Warsh, nominated to succeed Jerome Powell, is set to face lawmakers in his first major test as a potential head of the Federal Reserve.

Warsh will appear this Tuesday before the Senate Banking Committee, where legislators are expected to press him on his views on monetary policy and his calls for a fundamental shift in the Fed’s direction. The hearing comes at a critical moment, with Powell’s term as chair set to end on May 15.

However, the path to confirmation remains uncertain. Key Republicans have already signaled they may block Warsh’s nomination unless the Donald Trump administration drops an ongoing criminal investigation involving Powell and the central bank—arguing it poses a threat to Fed independence.

Michael Townsend, managing director of legislative and regulatory affairs at Charles Schwab, warned that the timeline is tight. He noted that Senator Thom Tillis is refusing to support a confirmation vote until the investigation is resolved, even if the hearing proceeds.

In the meantime, Powell has indicated he would remain in place on an interim basis if the confirmation process is delayed—prompting renewed threats from Trump, who has said he would consider removing him if that scenario unfolds.

A moment for clarification

Warsh’s appearance will also serve as a platform to clarify his evolving policy stance. Previously critical of the Fed’s current leadership, he has called for a “regime change” and described Powell’s tenure as “unsuccessful,” though without fully detailing his proposed alternatives.

Historically known as a hawk focused on inflation control, Warsh shifted his tone throughout 2025, signaling openness to rate cuts. He has argued that productivity gains driven by advances in artificial intelligence could help contain inflationary pressures.

Another key proposal likely to face scrutiny is his call for the Fed to reduce its $6.71 trillion balance sheet—a position shaped by his experience as a Fed governor during the 2008 financial crisis.

These views, along with questions about Trump’s potential influence over his policy approach, are expected to be central to the hearing, which will be chaired by Senator Tim Scott, a Republican who has expressed support for Warsh despite divisions within the party over the nomination process.