Kevin Warsh was officially confirmed by the U.S. Senate on Wednesday as the next chair of the Federal Reserve, marking a major leadership transition at the central bank as markets grapple with persistent inflation and growing political pressure over interest rates.

Warsh, 56, will succeed Jerome Powell, whose term as Fed chair ends on Friday after leading the institution since 2018. The Senate approved Warsh in a narrow 54-45 vote, making it one of the most politically divided confirmations for a Fed chair in modern history.

The confirmation process stretched over several months and followed an extensive search by President Donald Trump’s administration for Powell’s replacement. Pennsylvania Democrat John Fetterman was the only senator from the opposing party to support Warsh’s nomination.

Although Powell is stepping down as chair, he is expected to remain on the Federal Reserve Board as a governor, with two years still left in his term. Powell recently indicated he plans to stay at least until an ongoing review into the Fed headquarters renovation project is completed.

Warsh takes over during a sensitive period for U.S. monetary policy. Recent economic data has shown inflation continuing to run above the Fed’s 2% target, while producer prices and other indicators suggest cost pressures remain elevated. As a result, financial markets have reduced expectations for interest-rate cuts this year, with some investors even considering the possibility of another rate increase.

Trump has repeatedly criticized Powell’s approach to interest rates and has openly pushed for lower borrowing costs. The White House welcomed Warsh’s confirmation, describing it as an important step toward restoring confidence and accountability in Federal Reserve policy decisions.

A former Fed governor from 2006 to 2011, Warsh previously served during the global financial crisis, when the central bank introduced aggressive emergency measures to stabilize the economy. During and after his time at the Fed, he became increasingly skeptical of large-scale asset purchases and other unconventional policy tools.

Since leaving the central bank, Warsh has remained active in economic policy discussions, teaching at Stanford Graduate School of Business and serving on several corporate boards. He has also been a vocal critic of recent Federal Reserve policies, arguing that the institution needs significant reform.

Warsh’s first meeting as chair of the Federal Open Market Committee is scheduled for June 16-17, where investors will closely watch for signals on the future direction of U.S. interest rates.

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