- Kevin Warsh confirmed as Federal Reserve chair with a 54-45 Senate vote
- Vote was the narrowest ever for a Federal Reserve chair confirmation
- Warsh pledged to maintain Federal Reserve's monetary policy independence
The Senate confirmed Kevin Warsh as chair of the Federal Reserve with a narrow margin, marking a significant leadership transition at the US central bank amid questions of its political independence.
On Wednesday, May 13, the 54-45 vote was the slimmest confirmation margin ever for the Federal Reserve, which comes as Democrats fear that Warsh will follow US President Donald Trump's demand to lower key interest rates, Bloomberg reported.
John Fetterman of Pennsylvania, the only democrat crossed party lines to support Warsh to succeed Jerome Powell.
Fed picks have typically received bipartisan backing, except when Alan Greenspan won unanimous support to continue as Fed chair in 2000.
The Senate voting was conducted hours after the government released wholesale prices data that raised concerns over growing inflation. The producer price index in the month of April jumped 6% from a year ago, exceeding Bloomberg estimates. The core measure of wholesale inflation that excludes food and energy was around 5.2%, indicating US-Iran war led increase in energy costs reflecting on other goods.
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High inflation accelerated by war oil price shock is likely to be a challenge for the US central bank, which has a dual mandate to balance inflation and unemployment rate.
56 year old Warsh, who advised Trump on his economic policy was passed over for the Fed chair role in 2017 when Trump chose Powell, whose term will end on Friday.
Amid continuous demand to cut interest rates by Trump, Warsh pledged during his confirmation hearing that the central bank's monetary policy would be "strictly independent" under his tenure. Notably, the US President has repeatedly called out Powell for not cutting interest rates.
ALSO READ: Will Kevin Warsh Cut Rates After Taking Over As Fed Chief? What We Know So Far
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