<\/p>\n
Congress returns to Washington this week with still no word as to when Fed Chair nominee Kevin Warsh will appear before the Senate Banking Committee as President Donald Trump\u2019s pick to replace his nemesis Jerome Powell.<\/p>\n
The hearings, originally expected to begin in March, have been left off the committee\u2019s calendar once again as of April 13.<\/p>\n
But when that day finally arrives, Warsh, a former Fed governor once known for his hawkish views on monetary policy, can expect a slew of questions (and some pretty harsh ones from both parties) in his attempt to \u200bsucceed Powell when his term as leader concludes in May.<\/p>\n
Questions will arise about the Federal Reserve\u2019s role, how it functions, and its impact on the economy, prices, and the workforce.<\/p>\n
USAFacts, a nonprofit organization whose mission is to make government data accessible and understandable for the American public, published a March 2026 brief focused on the Fed Chair nomination process and derived a series of eight questions for Warsh from it. (You can read the details here for free.)\u00a0<\/p>\n
What do current economic trends indicate?\u00a0<\/p>\n
The Federal Reserve is charged with a dual mandate of promoting stable prices and maximum employment.\u00a0<\/p>\n
The latest Personal Consumption Expenditures Price Index indicates that annual inflation is at 2.8% as of February 2026, above the Fed\u2019s informal target of 2%.\u00a0<\/p>\n
More Federal Reserve:<\/p>\n
Fidelity delivers sobering interest-rate message amid Fed pause<\/p>\n
Additionally, the unemployment rate has risen from 3.4% in April 2023 to 4.3% today, and payroll employment has fallen in five of the last 12 months.<\/p>\n
So Warsh, a 55-year-old lawyer, can expect to be grilled on the following:\u00a0<\/p>\n
What do you think are the reasons that inflation has persisted and that the labor market has weakened in recent years?As Fed chair, what steps would you take to slow inflation and strengthen the labor market?How has economic data informed the Fed\u2019s monetary policy decisions through events of the past two decades, such as the Great Recession, the COVID-19 economic crisis, and pandemic-era inflation?<\/p>\n
How valid is the Fed\u2019s use of economic data?<\/p>\n
The Fed relies extensively on economic data published by the federal statistical agencies when making monetary policy decisions.\u00a0<\/p>\n
This has widespread ramifications for interest rates, economic growth, the job market, and consumer prices.\u00a0<\/p>\n
Ensuring the U.S. government\u2019s data remains objective, timely, reliable, and easy to access is essential for enabling the Fed to make effective decisions.<\/p>\n
\u00a0The government statistical agencies have come under repeated fire, especially during the DOGE period, for using outdated methodology to conduct and report data.<\/p>\n
Here\u2019s what Warsh can expect on government data and the Fed:<\/p>\n
What role do you think economic data provided by the Bureau of Labor Statistics, the Bureau of Economic Analysis, the Census Bureau, and other federal statistical agencies should play in the Federal Reserve\u2019s monetary policy decisions?What additional data do you think the government should provide to better inform the Federal Reserve\u2019s assessment of the economy and prices?What would you do to ensure that data continues to be foundational to the Federal Reserve\u2019s decision-making?What reform is required for the Bureau of Labor Statistics?<\/p>\n
The Federal Reserve relies heavily on labor market and price data specifically published by the Bureau of Labor Statistics.\u00a0<\/p>\n
Many of these datasets are based on surveys like the Current Population Survey. However, those surveys have recently faced declining response rates, and, in turn, large revisions.<\/p>\n
In August 20205, Trump fired the head of the BLS after the agency reported job revisions that the president argued were politically rigged to cast his economic agenda in a poor light. Economists across the globe blasted the move.\u00a0<\/p>\n
Here\u2019s what Warsh might expect the senators to ask him about the BLS:<\/p>\n
What steps do you think should be taken to address these challenges and modernize one of the nation\u2019s most important statistical agencies?What opportunities do you think there are to incorporate private sector and state government data into federal statistics about prices and the labor market?What will the impact of AI-ready data be on the Fed?<\/p>\n
In March, the White House called on Congress to provide resources to make federal datasets \u201cAI-ready\u201d as part of its National Policy Framework for Artificial Intelligence.<\/p>\n
\u00a0As USAFacts recently highlighted, making government data AI-ready means that Americans can ask AI platforms about today\u2019s pressing policy issues, and consistently get accurately cited, contextual government data on return.<\/p>\n
Here\u2019s what Warsh can expect senators to ask him about AI and the Fed:<\/p>\n
How do you think AI-ready data would impact the Federal Reserve\u2019s ability to access and analyze government data when assessing the state of the economy?White House wants lower interest rates, smaller Fed balance sheet<\/p>\n
Trump, who has repeatedly criticized Powell personally (\u201ca moran\u2019\u2019) and professionally (\u201cToo Late\u2019\u2019) for not slashing interest rates to 1% or lower over the last 14 months.\u00a0<\/p>\n
There has been little formal movement to \u2060get Warsh in place to take over from Powell, which means as Reuters reported March 7, that the time for a seamless transition is running out.\u00a0<\/p>\n
The process is \u200bfurther complicated by a widely criticized criminal investigation the Department of Justice led by Trump ally Jeanine Pirro has launched against Powell for allegedly lying to Congress about the $2.5 billion cost of the Fed headquarters renovations. Powell has said the probe is a pretext to pressure him to lower interest rates.<\/p>\n
The unprecedented probe has prompted one Republican member of the banking committee, without whose vote the nomination can\u2019t be passed to the full Senate, to delay the process until the Powell investigation is shut down permanently.<\/p>\n
Related: Powell sends message on U.S. economy and AI-related job loss fear<\/p>\n
Messages to Senate Banking Chair Tom Cotton, R-Ark., and Sen. Elizabeth Warren, D-Mass., the ranking member, were not returned in time for publication.<\/p>\n
Warsh \u201cunderstands the Federal Reserve very well\u201d as a \u2060former central \u200bbanker, and \u201che has a keen understanding of what our mission is, and the importance \u200bof what we do,\u201d New York Fed President John Williams said earlier this month, according to Reuters.<\/p>\n
\u201cI haven’t spoken to him lately, but I do expect that when he does get confirmed by the Senate, that he will share his \u200bviews and perspectives as he thinks about\u2026what he wants to accomplish as chair,\u201d said Williams, a close ally of Powell.<\/p>\n
What\u2019s up with USAFacts? Big money. And lots of it.Steve Ballmer, the founder of USAFacts, succeeded Bill Gates as CEO of Microsoft.After retiring from Microsoft in 2014, he purchased the Los Angeles Clippers of the NBA for a then-record $2 billion.\u00a0In 2017, he founded USAFacts, a non-profit organization focused on making government data accessible and easy to understand for the general public.<\/p>\n
Related: JPMorgan has a stark message on the next Fed rate cut<\/p>\n
#Fed #Chair #nominee #Warsh #faces #makeorbreak #looming #questionsin #controversial #Senate #hearing<\/p>\n","protected":false},"excerpt":{"rendered":"
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