Warsh's Fed Board Nomination Passes; Chair Confirmation Vote Set for the 13th

[Financial News]  
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The United States Senate approved the nomination of Kevin Warsh, 56, for a seat on the Federal Reserve System (FRS) on the 12th, local time. A vote to confirm Warsh as chair is expected to take place on the 13th.
According to CNBC, the United States Senate passed Warsh's board nomination by a vote of 51-45 in a full-floor vote that day. Among Democrats, only Senator John Fetterman of the Commonwealth of Pennsylvania voted in favor.
Warsh previously served as a Fed board member from 2006 to 2011.
With the nomination approved, Warsh will become a Fed board member with a 14-year term. The chair, whose vote is scheduled for the 13th, serves a four-year term.
Warsh's appointment also brings to an end Stephen Miran's brief tenure as a Fed board member, which filled the vacancy left by Adriana Kugler's resignation in August last year.
If the chair confirmation vote passes as expected on the 13th, Warsh will take the helm of the Fed after Jerome Hayden Powell's term as chair ends on the 15th.
Warsh, who will replace Powell as the Fed's leader after Powell steps down at the end of his eight-year run following one reappointment during the Joe Biden administration, faces a difficult road ahead.
Warsh must contend with inflationary pressure as oil and other commodity prices rise amid the Iran war launched by Donald Trump on February 28. At the same time, he will need to revive a sluggish labor market as AI adoption accelerates. The labor market has seen relatively few layoffs, but new hiring remains weak.
Warsh must also respond to Trump's pressure for interest-rate cuts. During the Fed chair selection process, reports said he had promised Trump a rate cut, but Warsh has denied making any such commitment.
Still, while denying that he made any promise, he has emphasized in several statements that there is room to lower rates.
Markets expect Warsh will find it difficult to actually cut rates. Some even predict he could raise rates if inflationary pressure intensifies.
Warsh will begin walking a dangerous tightrope between inflation and Trump's pressure for rate cuts at the Federal Open Market Committee (FOMC) meeting on the 16th and 17th of next month.
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dympna@fnnews.com Song Kyung-jae Reporter