Former Fed economist raises alarm on Warsh after historically partisan vote: ‘this is not normal is going to be a theme’
The Senate Banking Committee advanced Kevin Warsh's nomination to chair the Federal Reserve in a historically partisan 13-11 vote, marking a break from tradition and raising concerns about the central bank's independence. Former Fed economist Claudia Sahm criticized Warsh's demeanor during his confirmation hearing, particularly his joking responses to serious questions from senators, which she viewed as disrespectful. Experts warn that Warsh’s nomination, occurring amid political pressure and a lack of clarity on his monetary policy views, could undermine the Fed’s credibility and effectiveness in future crises.
- ▪The Senate Banking Committee voted 13-11 along party lines to advance Kevin Warsh’s nomination, the first fully partisan committee vote on a Fed chair in its history.
- ▪Claudia Sahm, a former Federal Reserve economist, expressed concern that Warsh’s jokey replies during his hearing showed a level of disrespect not typically seen from Fed officials.
- ▪Skanda Amarnath of Employ America argued that Warsh missed opportunities to build bipartisan trust by failing to engage seriously with senators’ questions.
- ▪Warsh served as a Federal Reserve governor from 2006 to 2011 and later became a vocal critic of the Fed’s reliance on consensus forecasting and data-dependent policy.
- ▪Current Fed Chair Jerome Powell held interest rates steady at around 3.6% in what is likely his final rate decision before his term ends on May 15.
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The Senate Banking Committee voted 13-11 along party lines Wednesday to advance Kevin Warsh’s nomination as the next chair of the Federal Reserve, the first fully partisan committee vote on a Fed chair in the panel’s history, according to Sen. Elizabeth Warren. Hours later, current Fed Chair Jerome Powell will deliver what is very likely to be his last interest-rate decision before his term expires May 15, holding rates steady at around 3.6%.Recommended Video To Claudia Sahm, the former Federal Reserve economist known for founding the eponymous recession indicator, the vote is just the start of the idiosyncrasy. “This is not normal is going to be a theme,” Sahm told Fortune.
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