Analysis: The threat to the Fed’s independence isn’t over

The Fed declined to comment. Warsh didn’t immediately respond to a request for comment. 

“The White House remains as confident as before that the Senate will swiftly confirm Kevin Warsh as the next Federal Reserve Chairman to finally restore competence and confidence in Fed decision-making,” White House spokesman Kush Desai said in a statement.

Trump nominated Powell in 2017 to the chair he now holds, but the president quickly soured on him because he disliked how Powell handled interest rates. During his first term in the White House, Trump considered firing Powell but didn’t take action. 

In his second administration, Trump has gone further. He has berated Powell for not deeply cutting interest rates, which Trump says make it more expensive to finance U.S. debt.

The Fed is charged by statute with setting rates to try to best allow for full employment and low inflation. Countries where central banks have lost their independence, such as Turkey, have seen inflation spike.

Pirro has said she has acted independently in deciding to investigate Powell, but Trump has supported the probe wholeheartedly. He has said he believes there was “criminality” involved in the Fed’s renovation project. 

Trump in August said he was removing governor Lisa Cook from the Fed’s board, alleging she had engaged in mortgage fraud. She has fought those allegations and courts have allowed her to stay in her seat while the case is pending before the Supreme Court. Powell attended the court’s arguments in January on Cook’s case. A decision could come as soon as Wednesday. 

Even if the court allows Cook to remain in place, the president could still later seek to remove Powell. Trump suggested recently he is contemplating doing so, even if Warsh is confirmed as chair. Powell can stay in his separate position as a governor on the Fed’s seven-member board through January 2028. 

“I’ll have to fire him, OK? If he’s not leaving on time,” Trump said in an April 15 interview on Fox Business.

“This has been a concerted effort to provide the administration to exert control over Fed policymaking,” Menand said. “It’s been ongoing for a year, and the administration has pivoted multiple times to different tactics.” 

Trump isn’t likely to give up his interest in the Fed under a new chair. Trump would be disappointed if Warsh doesn’t quickly lower rates, the president told CNBC on the morning of Warsh’s Senate confirmation.

Warsh said at the hearing it will be his — and the Fed’s — decision on where to set rates, regardless of what Trump says. “I do not believe that independence of monetary policy is threatened when elected officials state their views on rates,” Warsh said. “Fed independence is up to the Fed.”

Trump may yet make him prove it. 

Article source: https://www.cnbc.com/2026/04/24/fed-kevin-warsh-jerome-powell.html