Recap of Kevin Warsh’s confirmation hearing
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Warsh was grilled about his capability for independence if he were to be confirmed as Federal Reserve chairman. Democratic lawmakers on the Senate banking committee said that Donald Trump’s overtures for the central bank to cut interest rates at his insistence, could leave his nominee susceptible to deference. During the hearing, Senator Elizabeth Warren said she was concerned that Warsh would be a “sock puppet” for the president, while Senator Jack Reed noted that earlier Trump said he would be disappointed if the next Fed chair didn’t slash interest rates, despite rising inflation. Later Warsh said that the president has never asked him to “predetermine, commit, fix, decide on any interest rate decision in any of our discussions. Nor would I ever agree to do so”.
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Warsh faced questions about his financial disclosures, and more than $100m in assets. Warren had a particularly heated exchange with the Fed chair nominee about some of the investments, which come with confidentiality agreements. Warsh avoided the Democratic senator’s questions about whether any of these companies are affiliated with Trump or his family, Chinese control companies, facilitate money laundering, or help finance vehicles set up by Jeffrey Epstein. Trump’s pick to lead the central bank simply said that he would sell these assets if he is confirmed by the Senate.
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In another back-and-forth with Warren, Warsh refused to say that Donald Trump lost the 2020 election. “I’m just asking a factual question. I need to know. I need to measure your independence and your courage,” Warren said. “Senator, I believe that this body certified that election many years ago,” Warsh replied, earlier noting that the Federal Reserve tries to “keep out of politics”.
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Lawmakers from both side of the aisle noted the pressure Trump has put on current chair Jerome Powell, and how that’s sought to muddle Fed independence. Senator Thom Tillis, the outgoing Republican who has vowed to stall Warsh’s confirmation until the criminal investigation into Jerome Powell’s handling of the Federal Reserve renovations is dropped, said that Trump’s pick to lead the central bank has “extraordinary credentials” but implored the justice department to “get rid” of the probe into Powell, so he could support Warsh’s nomination.
Key events
Tom Ambrose
The US vice-president JD Vance has not yet departed Washington for talks on Iran and is participating in additional policy meetings, a White House official said on Tuesday afternoon.
It comes as president Donald Trump said earlier in the day that the US is in a strong position for talks with Iran during a second round of negotiations in Pakistan.
“We’re going to end up with a great deal. I think they have no choice … We’re in a very, very strong negotiating position,” Trump told CNBC earlier.
A US delegation led by Vance had been expected to leave shortly from Washington for Islamabad, which earlier this month hosted a first round of talks, ending without progress.
Recap of Kevin Warsh’s confirmation hearing
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Warsh was grilled about his capability for independence if he were to be confirmed as Federal Reserve chairman. Democratic lawmakers on the Senate banking committee said that Donald Trump’s overtures for the central bank to cut interest rates at his insistence, could leave his nominee susceptible to deference. During the hearing, Senator Elizabeth Warren said she was concerned that Warsh would be a “sock puppet” for the president, while Senator Jack Reed noted that earlier Trump said he would be disappointed if the next Fed chair didn’t slash interest rates, despite rising inflation. Later Warsh said that the president has never asked him to “predetermine, commit, fix, decide on any interest rate decision in any of our discussions. Nor would I ever agree to do so”.
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Warsh faced questions about his financial disclosures, and more than $100m in assets. Warren had a particularly heated exchange with the Fed chair nominee about some of the investments, which come with confidentiality agreements. Warsh avoided the Democratic senator’s questions about whether any of these companies are affiliated with Trump or his family, Chinese control companies, facilitate money laundering, or help finance vehicles set up by Jeffrey Epstein. Trump’s pick to lead the central bank simply said that he would sell these assets if he is confirmed by the Senate.
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In another back-and-forth with Warren, Warsh refused to say that Donald Trump lost the 2020 election. “I’m just asking a factual question. I need to know. I need to measure your independence and your courage,” Warren said. “Senator, I believe that this body certified that election many years ago,” Warsh replied, earlier noting that the Federal Reserve tries to “keep out of politics”.
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Lawmakers from both side of the aisle noted the pressure Trump has put on current chair Jerome Powell, and how that’s sought to muddle Fed independence. Senator Thom Tillis, the outgoing Republican who has vowed to stall Warsh’s confirmation until the criminal investigation into Jerome Powell’s handling of the Federal Reserve renovations is dropped, said that Trump’s pick to lead the central bank has “extraordinary credentials” but implored the justice department to “get rid” of the probe into Powell, so he could support Warsh’s nomination.
Sam Levine
The Department of Justice has launched a criminal investigation into the Southern Poverty Law Center (SPLC), a prominent civil rights organization, the group’s CEO said on Tuesday.
Bryan Fair, the CEO of the SPLC, said the details of the investigation were not entirely clear, though “the focus appears to be on the SPLC’s prior use of paid confidential informants to gather credible intelligence on extremely violent groups”.
The investigation is being handled by the US attorney district for the middle district of Alabama, which includes Montgomery, the state capital where the SPLC is based, according to a person familiar with the matter. The justice department and the US attorney’s office for the middle district of Alabama did not respond to a request for comment.
Fair said the group used to use paid informants to infiltrate extremist groups and monitor them, but no longer does.
“This use of informants was necessary because we are no stranger to threats of violence. In 1983, our offices were firebombed, and in the years since, there have been countless credible threats against our staff,” he said. “For decades, we engaged in unprecedented litigation to dismantle the Klan and other hate groups. In light of that work, we sought to protect the safety of our staff and the public.”
The investigation comes as the Trump administration has pledged to crack down on non-profit groups opposed to its priorities. Conservative groups have long decried the way the SPLC has labelled certain right-leaning groups as “hate groups”.
Warsh dodged a question by Republican senator Bernie Moreno, who claimed maximum employment in the US is threatened by illegal immigration.
“I’m gonna let you guys handle immigration policy,” Warsh said.
“The central bank takes the labor market is as it is, and that’s a function of policies you and the administration put in place. It’s not our place to be opining on that,” he added.
The hearing was finalized after Moreno’s turn.
During today’s hearing, Democratic senator Lisa Blunt Rochester was skeptical of “making a bet” on artificial intelligence and adjusting economic policy based on predictions, especially amid the lack of data on AI. She asked Warsh about what would happen to policy if the surge doesn’t materialize as expected.
“I think the essential elements of new policy for the Federal Reserve is to get access to better data and to dig deeper into the productivity possibilities that can come out of this new investment wave,” Warsh said. “Today, we call it artificial intelligence. Two years from now, we’re going to call it business CapEx, and three years from now, we’re going to call it just ordinary business.”
“I think it has two important effects on the conduct of policy. I don’t claim to have perfect knowledge of how any of these are going to go, but I do have an intuition the pace of change is accelerating,” he added.
Democratic senator Andy Kim discussed the financial woes of everyday Americans during today’s hearing and asked Warsh whether he agrees that American families are currently struggling with affordability.
“Central bankers should not be second-guessing what people feel and see in their own lives, people’s experience, lived experiences, matter to them,” Warsh said. “What I can say is the central bank has some responsibility for the things that you’ve described, and that the legacy of inflation, what I think is the biggest economic policy error in 40 or 50 years, happened just a few years ago, and we’re still living with the remnants of it.”
Kim also asked Warsh whether he is concerned about long-term price increases amid the war in Iran.
“The Fed should have an open mind towards all sorts of data, but the things that central banks can affect are things that are not one-off in nature, but are persistent and find their way into the generalized price level,” Warsh replied.
Senator Thom Tillis, the outgoing Republican who has vowed to stall Warsh’s confirmation until the criminal investigation into Jerome Powell is dropped, said that Trump’s pick to lead the central bank has “extraordinary credentials” and he praised Warsh’s focus on ensuring Fed independence.
However, Tillis said that the probe into Powell’s handing of the Federal Reserve renovations is fundamentally unnecessary. “There were a variety of reasons why this building went over budget,” he said, while staff held up posters explaning the escalating costs. “If we put everybody in prison in federal government that had had a budget go over, we’d have to reserve an area roughly the size of Texas for a penal colony.”
He implored the justice department to “get rid” of the probe into Powell, so he could support Warsh’s confirmation.
Senator Jack Reed, another Democrat, also pressed Warsh about an interview earlier today where Donald Trump said he would be disappointed if the new Fed chair doesn’t cut interest rates.
Warsh said he would maintain independence, despite the fact that the president expresses his desire to cut rates “quite publicly, without surrogates or subterfuge”.
Later, Warsh said that Trump has never asked him to “predetermine, commit, fix, decide on any interest rate decision in any of our discussions. Nor would I ever agree to do so,” in response to a question from Senator John Kennedy.
Warsh refuses to say that Trump lost 2020 election
In another back-and-forth with Democratic senator Elizabeth Warren, Warsh refused to say that Donald Trump lost the 2020 election.
“I’m just asking a factual question. I need to know. I need to measure your independence and your courage,” Warren said.
“Senator, I believe that this body certified that election many years ago,” Warsh replied, earlier noting that the Federal Reserve tries to “keep out of politics”.
Warren engaged in a particularly heated exchange Trump’s pick to lead the Federal Reserve.
One of her main causes of concern is that Warsh holds assets worth well over $100m. According to the financial disclosures Warsh was required to submit for the role of Fed chair, he holds two investments worth more than $50m each in the Juggernaut Fund LP and $10.2m in consulting fees from the investment office of billionaire Stanley Druckenmiller.
However, the Juggernaut Fund investments, for example, come with confidentiality agreements that don’t require Warsh to disclose details of the assets.
Warren asked Warsh whether any of these stakes are in companies affiliated with Trump or his family, companies that have facilitated money laundering, Chinese-controlled companies, or helping to finance vehicles set up by Jeffrey Epstein.
In response, Warsh simply insisted that he would sell these assets if confirmed, but did not directly answer Warren’s line of questions.
“You just won’t tell us,” Warren said. “Will you disclose how you [will] divest those assets, or will you just collect the check for $100m?”
Warsh insists that he will maintain Fed independence, regardless of pressure from administration
During his opening statement today, Kevin Warsh told lawmakers on the banking committee that the independence of the Federal Reserve is paramount. Senator Elizabeth Warren has said that she is concerned Warsh would simply be a “sock puppet” for Donald Trump. Today, Warsh said that he does not believe that “independence of monetary policy is threatened when elected officials speak their views on rates fed. Independence is up to the Fed”.
Warren: ‘We should not be having this hearing today’
Elizabeth Warren, the ranking member of the Senate banking committee, said that “we should not be having this hearing today” while addressing Kevin Warsh and her colleagues on the panel.
Warren said that Donald Trump’s “chaotic tariffs”, the One Big, Beautiful Bill and his war with Iran are all “driving up the cost of nearly everything here at home”.
The Democratic senator also noted that Trump has “repeatedly and illegally attempted to take over the Fed”, with his “bogus attacks” on Governor Lisa cook and chair Jerome Powell.
Warren said these attempts were designed to “threaten all the members of the Fed to do the president’s “bidding “and open more spots for “Trump flunkies”.
Kevin Warsh’s confirmation hearing has started, and we’ll bring you the latest lines as it gets under way.
The Senate banking committee’s chair, Republican Tim Scott, kicked off his opening remarks by underscoring the importance of the central bank, and the role of its chair.
“Monetary policy choices made at the Federal Reserve can affect the Americans ability to buy groceries, whether or not they can afford a home, how far their paycheck goes, especially at the end of the month,” Scott said.
He noted that, under the Biden administration, the Federal Reserve “appeared to move with the political winds, raising real concerns about politics and weaponizing on the most powerful weapons we have for good”.
However, since Donald Trump returned to office, he’s instigated a feud with the current chair, Jerome Powell. The president has routinely slammed Powell for refusing to cut interest rates at his insistence. He’s also pushed a criminal investigation into Powell for alleged mismanagement of Federal Reserve renovations.
Hegseth says that Pentagon is ending flu vaccine requirement for service members
In a video posted to social media, Pete Hegseth signed an new policy ending the flu vaccine requirement for US service members.
The defense secretary said he was using this opportunity to “discard any overreaching mandates that only weaken our war-fighting capability”.
Medical experts note that the flu vaccine protects against three or four virus strains that cause influenza each year, and most severe cases of the virus are in unvaccinated individuals.
“The notion that a flu vaccine must be mandatory for every service member, everywhere, in every circumstance at all times, is just overly broad and not rational,” Hegseth said in the video posted to X today.
“If you, an American warrior, entrusted to defend this nation, believe that the flu vaccine is in your best interest, then you are free to take it,” he added. “But we will not force you, because your body, your faith and your convictions are not negotiable.”
Chris Stein
Nearly three months to the day after his term as Virginia’s governor ended, Republican Glenn Youngkin stood in an unshaded corner of an office parking lot to warn dozens of conservative activists that they were in the midst of “the most important election” in the commonwealth’s 237-year history.
The question before the voters casting ballots at an early voting precinct a few yards away in the city of Leesburg, ahead of Tuesday’s special election, was whether to temporarily set aside Virginia’s congressional maps intended to advantage neither party and replace them with a new version that could allow Democrats to win all but one seat in the 11-member delegation in the November midterm elections.
“They want to override the voice of Virginia and push us into what is now being called the most partisan, most gerrymandered map in America, worse than Illinois, worse than California,” Youngkin warned.
Left unmentioned by the former governor was the role of Donald Trump, who instigated the nationwide redistricting war last year in an effort to preserve Republican control of Congress for the entirety of his second term, sparking a tit-for-tat between red and blue states that will see its latest skirmish decided on Tuesday, when polls close in Virginia’s redistricting referendum.
Trump says he would be disappointed if Warsh did not cut rates as Fed chair
Also in his interview with CNBC, Donald Trump said that he “would be” disappointed if Kevin Warsh, his nominee to lead the Federal Reserve, did not cut interest rates as soon as he took office after being confirmed by the Senate.
A reminder that Warsh is facing lawmakers today in a hearing, where he’ll face questions about his loyalty to the president and whether this would impact the central bank’s independence. Warsh is also facing pushback from one of the critical Republican votes on the Senate banking committee – Thom Tillis – who has refused to confirm any of Trump pick to lead the Fed as long as the criminal probe into Jerome Powell continues.
The president has remained resolute that “we have to find out” about the renovations of the new Federal Reserve building, which he has accused Powell of mismanaging, leading the justice department to investigate.
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