Senator Elizabeth Warren has sent a sharply worded letter to Federal Reserve Chair nominee Kevin Warsh, claiming his performance during the financial crisis should disqualify him from promotion and predicting he would act as a "rubber stamp" for Trump's Wall Street-first agenda. Separately, the Federal Reserve urged a judge to reject a prosecutor's request to revive an investigation into Chair Jerome Powell.
Massachusetts Democratic Senator Elizabeth Warren dispatched a critical letter on Thursday to Kevin Warsh, forecasting he would serve as a "rubber stamp for President Trump's Wall Street-first agenda" and alleging he learned "nothing" from his previous failures while serving at the Fed.
First reported by CNBC, the letter informed Warsh that his record as a Federal Reserve Board member from 2006 to 2011—spanning the 2008-09 financial crisis and the Great Recession—"should disqualify him from promotion."
Warren pointed out, "But President Trump has vowed that 'anyone who disagrees with him will never be Fed Chair.'" She added, "And you, apparently, passed his test."
"As Fed Chair, you would be responsible for setting policies that change the economy and significantly impact American workers and communities," Warren wrote. "However, your record of service before, during, and after the 2008 financial crisis raises serious doubts about your ability to handle this responsibility."
The letter, obtained by CNBC before its public release, posed sharp, detailed questions across ten different areas, demanding responses from Warsh during his confirmation hearing before the Senate Banking Committee, where Warren is a senior Democrat.
These questions were placed at the end of the eight-page letter, which served as a severe indictment of his tenure at the Fed. Warren also stated that after leaving the Fed, he consistently advocated "against stronger safeguards designed to prevent the failure of big banks and taxpayer bailouts."
Warren wrote in the letter's opening sentence, "I write to better understand whether you have learned anything from your failure, as a Fed Board member, to prioritize the interests of American families over Wall Street before, during, and after the 2008 financial crisis."
She continued, "Instead of implementing policies to improve the lives of Americans, you overlooked clear excessive risk-taking on Wall Street; after large financial institutions' bets wrecked the economy, you worked tirelessly to bail them out; and you advocated for policies that would further harm millions of Americans—people who lost jobs, were forced from their homes, and saw their life savings vanish."
Warsh did not immediately respond to CNBC's request for comment on the letter.
Warsh's nomination is already stalled because Warren's colleague on the banking committee, North Carolina Republican Senator Thom Tillis, stated he would effectively block full Senate consideration of the nomination until a criminal investigation involving Fed Chair Jerome Powell is resolved.
Federal prosecutor Jeanine Pirro of the District of Columbia has indicated she has no intention of dropping the investigation.
Pirro's office is seeking to overturn a March 11 ruling by a Washington federal judge that quashed a subpoena issued to the Fed as part of the Powell investigation. The probe allegedly focuses on cost overruns for an expensive renovation of the Fed's headquarters and testimony provided to the banking committee about the project.
On Thursday, the Federal Reserve Board urged a judge to reject the prosecutor's request. The Fed's lawyers, in a court document unsealed Thursday, informed District Court Judge James Boasberg that the motion for reconsideration filed by the U.S. Attorney's Office for the District of Columbia "fails entirely to meet the applicable legal standard."
The Fed's lawyers wrote in a motion filed in Washington federal district court, "The motion for reconsideration...does not even mention—let alone satisfy—the strict legal standard governing the extraordinary relief it seeks."
The lawyers stated that reconsideration should only occur if there is a change in the law relevant to the case, new evidence emerges, or "it is necessary to correct a clear error or prevent a manifest injustice." They asserted that none of these conditions were present.
The lawyers wrote, "(The prosecutor's) motion makes no attempt to surmount these high hurdles, instead resorting to mischaracterizations of the Court's opinion...and the record on which it is based."
The Federal Reserve Board initially sought to block the subpoenas issued to the central bank, arguing they and the criminal investigation were merely a pretext to pressure Powell into cutting interest rates faster and more deeply, as Trump has repeatedly demanded.
In his order quashing the subpoenas, District Judge Boasberg previously wrote, "There is ample evidence that the subpoenas' primary (if not sole) purpose was to harass and pressure Powell, either to bend him to the President's will or to force his resignation, making way for a more compliant Fed chair."
Since Trump returned to the White House in January 2025, he has repeatedly, yet unsuccessfully, attempted to pressure Powell and the entire Federal Reserve Board to cut interest rates more quickly and deeply than currently planned.
Powell stated in early March that he would continue to serve as interim chair if Warsh is not confirmed before his term as chair ends in May.
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