The U.S. Senate passes Warsh as a Fed governor and chair by a 51-45 vote, with the vote scheduled to appear on Wednesday

The U.S. Senate passed Kevin Warsh as a Federal Reserve (Fed) governor in a final round of voting—51 to 45—on May 12, paving the way for him to assume the Fed chair for a last vote that is expected to take place on Wednesday. According to CBS News, the 56-year-old Warsh is the frontrunner to replace the current chair, Jerome Powell; Powell’s 8-year chair term ends this Friday.

Voting results: 51-45 passed, with only Fetterman crossing party lines in support

Key figures for Warsh to become a Fed governor:

Senate voting result: 51 votes in favor, 45 votes against

Cross-party vote: Democratic Sen. John Fetterman (Pennsylvania) is the only Democratic senator supporting Trump’s nominee

Term length for governor: 14 years (until 2040)

Chair term: 4 years

Chair voting schedule: May 14 (Wednesday), expected

Powell’s current chair term end date: May 16 (Friday)

Warsh is not a newcomer to the Fed. He previously served as a Fed governor from 2006 to 2011, spanning the 2008 financial crisis. He studied at Stanford University and Harvard Law School, later served as a researcher at the Hoover Institution, and worked as an adviser to billionaire investor Stanley Druckenmiller.

Warsh’s policy stance: from “hawkish” to willing to cut rates

Within the Fed system, Warsh is known for “criticizing the size of the Fed’s balance sheet and the regulatory path.” After the 2008 financial crisis, he repeatedly criticized the scale of the Fed’s quantitative easing and clearly diverged from the policy direction associated with Bernanke. Traditionally, he has been classified as hawkish.

But in recent remarks, Warsh has shifted his public tone outward—expressing openness to rate cuts—and aligning with Trump’s preference that the Fed chair should push for rate cuts. This stance shift was key to Trump’s decision to ultimately nominate Warsh as chair—Warsh is not “hawk-to-dove by origin,” but he has taken an open position on the specific policy path that the U.S. should cut rates in 2026.

After Powell steps down as chair, he will not completely leave the Fed. He will remain as a “governor” (a rank-and-file member) until he is satisfied with “the investigation into him at the Senate testimony.” This makes Powell the first Fed chair in 75 years to remain on the board after stepping down.

Signals for markets, crypto, and the interest-rate path

Chain News Observations: Warsh’s appointment as Fed chair would carry three layers of meaning for crypto and the dollar-asset market.

First, the rate-cut path may accelerate. Although April CPI rose 3.8% year over year, reaching a new high since 2023/5, the CME FedWatch shows that there will be no rate cuts for all of 2026. If Warsh assumes the chair as expected, market bets on “a rate cut at some point in the second half” could rebound. Rate-sensitive assets such as BTC and gold may therefore see renewed buying demand.

Second, the Fed’s regulatory stance toward crypto assets may ease. Warsh previously criticized the Fed’s restrictions on commercial banks engaging in digital-asset business. If, after taking office, he reshapes the Fed’s policy framework for banks’ crypto activities, the U.S. stablecoin and BTC custody of institutions may benefit.

Third, the long-term watch on Fed independence. Even though Warsh has a background as an independent-leaning economist, during the nomination process, the way he “shifted to dovish” on the rate-cut stance has led the market to begin discussing whether the Fed’s independence is being affected under Trump’s administration. This is a deeper structural issue for the dollar’s long-term credibility.

Events to watch next include: the final chair-nomination voting result on 5/14, the tone of the first FOMC meeting after Warsh takes office (June), and how Powell’s decision to remain as a governor after leaving affects the internal voting ecosystem within the Fed.

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