White House formally nominates Kevin Warsh to be next Federal Reserve chair

WASHINGTON (AP) — The Trump administration has formally nominated Kevin Warsh, a former top Federal Reserve official, to be the next Fed chair when Jerome Powell's term ends in two months.

READ MORE: What economic experts think about Trump's choice of Kevin Warsh for Fed chair

Warsh's nomination, which was initially announced Jan. 30, was forwarded to the Senate Wednesday, where it will be taken up by the Senate Banking Committee.

Yet the nomination could stall there. Sen. Thom Tillis, a North Carolina Republican on the committee, has said he will oppose confirming Warsh until a criminal investigation into Powell is resolved. Powell revealed Jan. 11 that the Justice Department had subpoenaed the Fed over Powell's Senate testimony last June about the central bank's $2.5 billion building renovation project.

Tillis said last month that the committee could hold a hearing about Warsh's nomination, but he would vote to block confirmation. If all Democrats on the committee voted against Warsh as well, the nomination wouldn't pass out of the committee to the full Senate.

Warsh has harshly criticized the Fed's policies in recent years, including its low interest rate policies coming out of the pandemic, which he says contributed to the United States' largest inflation spike in four decades in 2021-2022.

Yet Warsh now has echoed President Donald Trump's demands for lower rates. Warsh says that productivity gains from artificial intelligence will help the economy grow more quickly without spurring inflation, enabling the Fed to reduce borrowing costs. Many Fed officials, however, disagree that AI's development will support rate cuts.