MW The top four takeaways from Trump Fed pick Kevin Warsh's confirmation hearing, according to strategist Tom Lee
By Nora Redmond
Kevin Warsh said President Donald Trump did not ask him to commit to cutting interest rates during his interview for the role.
One of the main takeaways of the Senate confirmation hearing on Tuesday for Kevin Warsh, President Donald Trump's pick to become chairman of the Federal Reserve, was the independence of the central bank, according to boutique research firm Fundstrat.
Warsh faced intense questioning during the hearing, with all 11 Democrats on the Senate Banking Committee opposing his nomination. Sen. Thom Tillis, the North Carolina Republican, said he won't vote to confirm Warsh until the Department of Justice drops its criminal investigation into current Fed chief Jerome Powell - Trump's own pick in 2017 to head the central bank - in relation to the renovation of the bank's Washington headquarters.
Tom Lee, managing partner and head of research at Fundstrat, told clients on Wednesday that there were four major takeaways from the hearing, with independence being the first.
Warsh was questioned by Sen. Ruben Gallego over he had been asked by Trump to cut interest rates during his interview for the role, to which Warsh replied that he was at no point expected to commit to a decision to cut.
The central bank and Powell in specific have faced a barrage of criticism from Trump over what Trump has characterized as a wrongheaded reluctance to cut rates. The investigation into Powell, a move that was blasted as pretextual by former central-bank leaders, was launched in November, and in August the president said he would fire Fed governor Lisa Cook over allegations of mortgage-document transgressions.
"He didn't ask, didn't demand, didn't require," Warsh, who served on the Board of Governors of the central bank from 2006 until 2011, said of whether Trump had extracted promises from him. "Nor would I have ever done so."
Warsh said that he would "absolutely not" be the president's "sock puppet" in response to comments from Sen. Elizabeth Warren, a Massachusetts Democrat, and Sen. John Kennedy, a Republican from Louisiana.
Lee pointed secondly to the focus on forward guidance, a tool used by the central bank since the early 2000s to inform the public about the likely direction of monetary policy. Warsh has argued that the Fed needs a new framework - away from outlooks.
The 56-year-old lawyer and financier argued that the Fed's forward guidance attempts to tell the world "what its dots will be, what its forecasts will be."
"Then the Fed, being human, holds on to those forecasts longer than it should," he said, adding that he looks forward to introducing a change if confirmed as chair.
Lee next highlighted inflation as a theme of the hearing, with Warsh claiming that inflation arises from government spending. "I don't think inflation comes about when the economy grows too much or Americans get wage increases," he said. "Inflation comes about when the government prints too much - meaning the central bank - and broadly the government spends too much."
The final takeaway Lee offered from the hearing was a criticism of how the Fed measures inflation. The central bank primarily uses the price index for personal consumption expenditures, or PCE, which tracks the prices American consumers pay for goods and services, to evaluate inflation. Warsh called this metric "imperfect," arguing that new data sources should be used.
"What I'm interested in is the underlying inflation rate, not one-time changes in geopolitics or beef prices," he said. "My broad sense is inflation risks have improved somewhat in the last year."
-Nora Redmond
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April 22, 2026 12:03 ET (16:03 GMT)
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