A Republican senator wants to block Donald Trump’s nominee to head the US Federal Reserve. There is also a threat of headwind from the Democrats.
rtr | US President Donald Trump has expressed confidence that his candidate for the head of the US Federal Reserve, Kevin Warsh, will be confirmed by the Senate. Warsh is “highly qualified” and could also receive votes from some Democrats, Trump told reporters on Saturday. “He should be confirmed without difficulty.” Trump had Former Fed board member Warsh was nominated on Friday as the successor to incumbent central bank chairman Jerome Powellwhose term ends in May.
But the nomination is encountering unexpected resistance within Trump’s own party. Republican Senator Thom Tillis announced Saturday that he would block Warsh’s confirmation in the Senate. Tillis wrote on social media that he would vote against any candidate for Fed leadership until a Justice Department investigation into Powell is “completely and transparently completed.” Trump reacted angrily and called Tillis a “blocker.”
The blockage has weight: Since the Republicans in the responsible Senate Banking Committee only have a majority of 13 votes to 11, a single dissenter can stop the entire process. Tillis said his actions demonstrate how the separation of powers works. A single senator could prevent the “most powerful man on the planet” from undermining the credibility and independence of the Fed.
In addition to the internal party dispute, Warsh faces headwinds from the Democrats. Senator Elizabeth Warren said the nomination was Trump’s latest attempt to take control of the Fed.
The background is interest rate policy
The conflict comes at a time of great tension between the government and the central bank. Trump recently tried Firing Fed Governor Lisa Cook, which is currently before the Supreme Court.
The background to Tillis’s resistance is an investigation into Powell over cost overruns on a renovation project. Powell dismisses the allegations as a “pretext” to exert political pressure on interest rate policy. Trump has repeatedly pushed the Fed to cut interest rates to stimulate the economy. He hopes the same from Warsh too.
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