U.S. Senate confirms Kevin Warsh as next Fed chair

WASHINGTON — The U.S. Senate on Wednesday confirmed Kevin Warsh as the next chair of the Federal Reserve, clearing the way for him to replace the central bank's outgoing chief Jerome Powell, whose term ends Friday.

All eyes are on whether Warsh can keep his promise to maintain the Fed's autonomy in setting interest rates after President Donald Trump relentlessly criticized Powell in a bid to pressure the bank to lower borrowing costs more quickly.

The Fed, under Warsh, will face the task of deciding interest rates at a time when the Iran war has driven up energy prices and complicated the inflation outlook. Its rate-setting Federal Open Market Committee kept its benchmark interest rate steady at its last meeting.

Warsh previously served as a Fed governor from 2006 to 2011.

Powell, who took the helm in 2018, has said he will remain on the central bank's board as one of its seven governors for "a period of time" -- a move that breaks with historical precedent upheld by almost all former Fed chiefs.

He has attributed the decision to his concern over a series of "legal attacks" against the Fed by the Trump administration.

Warsh's confirmation was held up in the Banking Committee for a time as a Republican senator effectively boycotted a vote until a federal criminal investigation into Powell was dropped.

Critics viewed the probe as an attempt by the Trump administration to force Powell to lower interest rates at the expense of the Fed's independence.

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