US President Donald Trump on Wednesday officially sent his nominee, Bitcoin supporter Kevin Warsh, to the US Senate, beginning the process to replace Jerome Powell when his term ends in May.
The White House has reportedly filed paperwork to appoint Wash to a four-year term as chairman and long-term governor of the central bank’s board of directors.
Nomination Sent to Senate
The nomination will now move to the Senate Banking Committee for review, according to multiple outlets. The committee will decide whether to hold hearings and then whether to send the nomination to the full Senate for a confirmation vote.
Timing is uncertain. Some senators have already said they will slow down the process until a separate Justice Department investigation is resolved.
Bitcoin Proponents: Warsh’s Records and Opinions
Warsh initially worked at the Federal Reserve. He has reportedly spoken publicly about Bitcoin, calling it a kind of “new gold” for young investors and saying it doesn’t make him nervous.
When the nominations were announced earlier, the market reacted quickly. At the time of this writing, the price of Bitcoin has surpassed the $70,000 level and some short positions have been liquidated as traders digest the news.
Warsh’s background is a mix of public services and private finance. He was a director of the Federal Reserve during turbulent times and later worked in the private sector and at the Center for Policy Research. That mix is part of what makes him attractive to some senators who favor low interest rates and worrisome to others who worry about the Fed’s independence.
How to read the market movements
According to the report, traders believe the Federal Reserve chairman’s preference for interest rate cuts is friendly to risk assets. Bitcoin’s price movements reflected this view in the hours after the filing reached the Senate.
Some analysts said faster changes in policy would depend on data, not headlines, and warned that inflation and global events were complicating any easy return to lower borrowing costs.
Political Obstacles Ahead
Opposition is already building. A Republican member of the Banking Committee said he could block the nomination until an outside investigation is concluded, and Democratic leaders have expressed concerns about Wash’s ties to the administration.
The opposition means smooth confirmation is far from certain despite a favorable majority in the Senate.
The next formal steps, according to the report, are committee hearings, written questionnaires and witness appearances. The committee could vote to promote Warsh or delay the nomination.
If the committee confirms him, the full Senate will take up the matter. As the hearing progresses, senators will ask for his views on inflation, interest rates and the role of cryptocurrencies in financial stability.
Featured image from Unsplash, chart from TradingView
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