Sen. Warren says Fed nominee Kevin Warsh would be Trump rubber stamp

Senator Elizabeth Warren sent a message bubble letter He attacked Federal Reserve presidential candidate Kevin Warsh on Thursday, predicting that he would serve as a “rubber stamp for President Trump’s Wall Street First Agenda,” accusing him of having “learned nothing from his failures” during his previous tenure at the central bank.

Warren, D-Mass., told Warsh in the letter, first reported by CNBC, that her history as a member of the Fed Board of Governors from 2006 to 2011 (including the 2008-09 financial crisis and the Great Recession) “should disqualify you from promotion.”

“But President Donald Trump has promised that ‘someone who disagrees with him will never be Fed Chairman,'” Warren said. he said.

“And it looks like you passed his test, too,” he added.

“As Chairman of the Federal Reserve, you will be responsible for directing economy-changing policies that have serious impacts.
“However, your track record leading up to, during, and after the 2008 financial crisis raises serious concerns about your ability to do so,” Warren wrote.

The letter, obtained by CNBC before it was made public, stated that Warsh was asked detailed questions about 10 different issues that needed to be answered for his confirmation hearing. Senate Banking CommitteeWhere Warren is the ranking Democrat.

But those questions were buried beneath a scathing, eight-page indictment of his tenure at the Fed and what he called his advocacy “against tougher measures aimed at preventing major bank failures and taxpayer bailouts” after leaving the central bank.

“I am writing to better understand what, if anything, you learned from your failure to prioritize American families over Wall Street before, during, and after the 2008 financial crisis while serving as a member of the Board of Governors of the Federal Reserve System,” Warren wrote in the first sentence of the letter. he said.

“Instead of implementing policies to improve the lives of the American people, you ignored the clearly excessive risk-taking on Wall Street; you worked tirelessly to bail out major financial institutions after their bets blew up the economy; you advocated for policies that would further harm millions of Americans who lost their jobs, were forced out of their homes, and saw their life savings evaporate.”

Warsh did not immediately respond to CNBC’s request for comment on the letter.

Warsh’s nomination remains in limbo as Sen. Thom Tillis, R-N.C., a member of Warren’s Banking Committee, has said it would effectively block the nomination from consideration by the full Senate until the criminal investigation into Fed Chairman Jerome Powell is resolved.

Jeanine Pirro, US attorney for the District of Columbia, stated that she has no intention of abandoning this investigation.

Pirro’s office is trying to reverse a March 11 ruling by a federal judge in Washington and is blocking subpoenas sent to the Fed as part of the Powell investigation, which allegedly focuses on cost overruns for expensive renovations of the Fed headquarters and testimony to the Banking Committee about that project.

“There is ample evidence that the dominant (though not the sole) purpose of the subpoenas was to harass and pressure Powell to either yield to the President or resign, making way for a Fed Chair who would do so,” District Court Judge James Boasberg wrote in his order quashing those subpoenas.

Trump has repeatedly and unsuccessfully pressured Powell and the entire Board to cut interest rates faster and deeper since Trump re-entered the White House in January 2025.

Powell said in early March that Warsh would remain interim chairman unless confirmed by May, when Powell’s term ends.

In her letter to Warsh on Thursday, Warren said there were “warning signs of a coming crisis” in the subprime mortgage market when she began her term on the Board.

“Yet instead of using the Fed’s strong supervisory and regulatory authorities to address the serious consumer and financial stability risks posed by subprime mortgages, you have advocated and even tacitly promoted these products,” Warren wrote.

“Surprisingly, in December 2007, you agreed that “subprime mortgages have a bad name.”
“In this environment,” he wrote, “you have also promoted derivatives and other forms of ‘financial innovation’ to spread risk and make the financial system safer.”

“You were wrong again.”

“You appear to have prioritized the interests of major financial institutions before the American public,” Warren said during the unfolding financial crisis.

“Given your seven years as a Morgan Stanley M&A executive before joining the George W. Bush Administration, your willingness to bail out Wall Street, including taxpayer-backed mega-mergers, was not surprising,” Warren wrote.

“It is well documented that you played a central role in establishing numerous regulations.” [multibillion-dollar] “He obtained ethics immunity to deal directly with Morgan Stanley, which quickly obtained special regulatory approvals needed for bailouts and even access to additional emergency support from the Fed.”

The senator said Warsh also advocates for higher interest rates, which “further endangers an ailing economy” that hurts jobs.

“Your monetary policy record demonstrates a repeated failure to accurately assess the impact of inflation on the American economy,” Warren wrote.

“It seems like you haven’t learned anything from your failures,” he wrote.

“Since leaving the Fed, you have opposed tougher measures to prevent major bank failures and taxpayer bailouts.”

— CNBC’s Matt Peterson contributed to this article.