The U.S. Senate has confirmed Kevin Warsh as a member of the Federal Reserve board, marking a key step towards his emergence as the next Fed chair. The Senate will now hold a separate vote to confirm him as Jerome Powell’s successor, a vote which could take place as soon as tomorrow.
Senate Confirms Kevin Warsh as Fed Board Member
The U.S. Senate voted 51 to 45 in favor of confirming the former Fed governor to return to the Board of Governors of the Federal Reserve for a 14-year term beginning on February 1, 2026. This comes after the Senate advanced his nomination yesterday by invoking cloture.
The Senate will now hold another vote to confirm Kevin Warsh as the next Chairman of the Federal Reserve, succeeding Jerome Powell. The legislative chamber already invoked cloture on this vote, paving the way for Warsh’s confirmation as the next Fed chair as soon as tomorrow.
A potential confirmation tomorrow will ensure that Kevin Warsh can assume office immediately once Powell’s term as Fed chair ends on Friday. As CoinGape reported, Powell will remain as a member of the Fed Board for the foreseeable future even after his term as Fed chair ends on Friday.
This is significant, as U.S. President Donald Trump won’t have a majority on the Fed Board just yet to push for a Fed rate cut. Market participants are currently pricing in the possibility that the Fed will hold rates steady throughout the year, despite Kevin Warsh’s imminent emergence as the next Fed chair.
Fed Rate Hike Odds Spike
Amid Warsh’s confirmation to the Fed board, the odds of a Fed rate hike this year have surged. Polymarket data show there is now a 27% chance the Fed will hike interest rates this year as inflation concerns mount.
Odds of a Fed rate hike climbed following the release of U.S. CPI inflation data. The CPI rose by 3.8% year-over-year (YoY) in April, above expectations of 3.7%. Inflation continues to trend upwards with the U.S.-Iran war putting pressure on energy prices.
Notably, the Fed mentioned during the April FOMC meeting that inflation is elevated, marking a shift from their previous description of inflation as “somewhat elevated.” As such, a rate hike has become a possibility as inflation trends above the Fed’s 2% target.
