Wash's nomination as US Fed Chair candidate passes Senate… likely to take office this week (Comprehensive)

Wash's nomination as US Fed Chair candidate passes Senate… likely to take office this week (Comprehensive)

Following the approval of his 'Fed Governor' nomination yesterday, the nomination for Fed Chair also passed.

Despite Trump's hopes for a 'rate cut', inflation concerns rise… future actions watched closely.

The nomination of Kevin Warsh, the next candidate for chairman of the Federal Reserve (Fed), the central bank of the United States, passed the U.S. Federal Senate on the 13th (local time).

The Senate put Warsh's nomination to a vote at its plenary session today, and it passed with 54 votes in favor and 45 against.

The confirmation vote showed clear partisanship. All 53 Republican senators voted in favor.

Among the 47 Democratic senators, only Senator John Fetterman (Pennsylvania), who has consistently shown pro-Trump tendencies, joined the 'yes' votes, and Senator Kirsten Gillibrand (New York) did not vote.

Previously, the Senate approved Warsh's nomination as a Fed Governor yesterday, and with the chairman's nomination also passing today, Warsh will be able to take office as Fed Chair immediately after the current chair Jerome Powell's term ends.

The term of the Fed Chair is four years, and current Chair Powell's term ends on the 15th. Warsh is expected to take office as the new Fed Chair as early as this week.

Chair Powell will step down from the chairmanship but has decided to remain as a Fed Governor. Accordingly, Warsh will take over the position of Governor Stephen Myron, who served as the White House National Economic Council Director in the second Trump administration.

Furthermore, Warsh will directly chair the Federal Open Market Committee (FOMC) meeting held on the 16th-17th of next month as chairman. The FOMC meeting is the body that determines the U.S. benchmark interest rate.

During his Senate hearing, Warsh emphasized the Fed's independence, stating his position to determine monetary policy based on the Fed's own judgment rather than the President's demands.

However, U.S. President Donald Trump has strongly criticized current Chair Powell, stating that the Fed has been an obstacle to the government's economic policies by not lowering interest rates in a timely manner, and had high expectations for interest rate cuts when he nominated Warsh as chairman candidate.

Ultimately, the future actions of 'Warsh's Fed' are drawing attention, but various economic indicators are not favorable for the Fed under Warsh to implement interest rate cuts as President Trump expects.

Due to rising energy prices following the U.S.-Iran conflict, the U.S. Producer Price Index (PPI) for April, announced by the U.S. Department of Labor's Bureau of Labor Statistics today, rose by 6.0% compared to the same period last year. The increase rate was the highest since December 2022.

In particular, after the Consumer Price Index (CPI) for April, announced yesterday, rose by 3.8% year-on-year, marking the largest increase in about three years, today's PPI also showed such figures, leading to increased concerns about rising inflation.

The Fed cut interest rates three times in a row in September, October, and December last year, then froze the benchmark interest rate at 3.50-3.75% in January, March, and April of this year, and the market widely expects no interest rate cuts this year.