Sparks flew on Capitol Hill as Sen. Elizabeth Warren, D-Mass., accused Federal Reserve nominee Kevin Warsh of being a potential “sock puppet” for President Donald Trump.
Warsh, tapped by Trump in January to lead the Federal Reserve, faced a two-and-a-half-hour confirmation hearing before the Senate Banking, Housing, and Urban Affairs Committee.
If confirmed, he would take the helm of the world’s most powerful central bank, shaping interest rates, borrowing costs and the financial outlook for millions of American households for the next four years.
WHO IS KEVIN WARSH, TRUMP’S PICK TO SUCCEED JEROME POWELL AS FED CHAIR?
In her opening remarks, Warren sharply criticized Warsh’s record and questioned his independence, arguing he is “uniquely ill-suited for the job as Fed chair” and warning he could give Trump influence over the central bank.
She accused Warsh of enabling Wall Street during the 2008 financial crisis, which fell during his tenure as a Federal Reserve governor when he served from 2006 to 2011.
“In our meeting last week, we discussed the 2008 financial crash, where 8 million people lost their jobs, 10 million people lost their homes and millions more lost their life savings,” Warren said. “Giant banks, however, got hundreds of billions of dollars in bailouts… and he said to me that he has no regrets about anything he did.”
She added that Warsh “worked tirelessly to arrange multibillion-dollar bailouts” for Wall Street CEOs, with nothing for American families.
The hearing grew more tense as Warren pivoted to ethics concerns, pressing Warsh over his undisclosed financial holdings and questioning him over links to business dealings connected to the late convicted sex offender Jeffrey Epstein.
The two spoke over each other and raised their voices in a heated exchange on Capitol Hill.
WARSH’S $226 MILLION FORTUNE UNDER SCRUTINY AS FED NOMINEE FACES SENATE CONFIRMATION
Sen. Elizabeth Warren: The Fed has been plagued by deeply disturbing ethics scandals in recent years. It’s critical that the next chair have no financial conflicts — none. You have more than $100 million in investments that you have refused to disclose. So let me ask: do the Juggernaut Fund or THSDFS LLC invest in companies affiliated with President Trump or his family, companies tied to money laundering, Chinese-controlled firms, or financing vehicles linked to Jeffrey Epstein?
Kevin Warsh: Senator, I’ve worked closely with the Office of Government Ethics and agreed to divest all of my financial assets.
Warren: Could you answer my question, please? You have more than $100 million in undisclosed assets. Are any of those investments tied to the entities I just mentioned? It’s a yes-or-no question.
Warsh: I have worked tirelessly with ethics officials and agreed to sell all of my assets before taking the oath of office.
Warren: Are you refusing to tell us if you have investments in vehicles linked to Jeffrey Epstein? You just won’t say?
Warsh: What I’m telling you is those assets will be sold if I’m confirmed.
Warren: Will you disclose how you plan to divest these assets? The public might question your motives if, for example, someone who profits from predicting Fed policy cuts you a $100 million check as you take office.
Warsh: I’ve reached a full agreement with the Office of Government Ethics and will divest those assets before taking the oath.
Warren: I’m asking a very straightforward question. Will you disclose how you divest those assets?
Warsh: As I’ve said, I’ve worked with ethics officials.
Warren: I’ll take that as a no.
In a separate exchange, Warren invoked Trump’s past statements about the Fed and challenged Warsh to prove his independence in real time.
She insisted that Warsh answer whether he believes Trump won the 2020 presidential election and if he would name policies of the president with which he disagrees. The hopeful future Fed chair dodged the question and said he would remain apolitical, if confirmed.
THE ONE LINE IN WARSH’S TESTIMONY SIGNALING A BREAK FROM THE FED’S STATUS QUO
Warren: Donald Trump has made clear he does not want an independent Fed. He has said, “Anybody that disagrees with me will never be Fed chairman.” He’s also said interest rates will drop “when Kevin gets in.” Let’s check out your independence and your courage. We’ll start easy. Mr. Warsh, did Donald Trump lose the 2020 election?
Warsh: Senator, we should keep politics out of the Federal Reserve.
Warren: I’m asking a factual question.
Warsh: This body certified the election.
Warren: That’s not what I asked. Did Donald Trump lose in 2020?
Warsh: The Fed should stay out of politics.
Warren: In our meeting, you said you’re a “tough guy” who can stand up to President Trump. So name one aspect of his economic agenda you disagree with.
Warsh: That’s not something I’m prepared to do. The Fed should stay in its lane.
Warren: Just one place where you disagree.
Warsh: I do have one disagreement — he said I looked like I was out of central casting. I think I’d look older and grayer.
Warren: That’s adorable. But we need a Fed chair who is independent. If you can’t answer these questions, you don’t have the courage or the independence.
