Kevin Warsh Dodges Grades and Economic Criticism at Fed Chair Confirmation Hearing

Kevin Warsh, former Federal Reserve board member and President Donald Trump’s nominee for Federal Reserve chair, pledged to introduce a new inflation framework and significant changes to the central bank during his Senate confirmation hearing on Tuesday morning. Yet he simultaneously praised the president’s economic performance, despite growing public skepticism.

One notable exchange unfolded between Warsh and Sen. Raphael Warnock (D-Ga.). Warnock asked Warsh to assign a letter grade to the American economy for the average working family. Warsh responded with humor, saying,

"In modern academic institutions they give everyone A’s. If I give a student anything but an A, I would have been summoned to the dean’s office."

Warnock pressed further, citing record-low consumer confidence as evidence of public dissatisfaction. Warsh did not provide a direct grade, avoiding a response that might displease the president. Warsh previously served as a lecturer at Stanford University after resigning from the Federal Reserve in 2011 over disagreements about economic policy.

Sen. Tina Smith (D-Minn.) also questioned Warsh about Trump’s State of the Union claim that "the roaring economy is roaring like never before." Warsh replied,

"The broad contours of the economy are improving. I think it can improve more, and in the years ahead, I think the economy’s potential is strengthening."

These remarks came as Americans face a deepening affordability crisis, with prices surging amid the ongoing U.S.-Israeli conflict in Iran and Trump’s tariffs—despite Wall Street’s apparent optimism. The hearing also revealed concerns about Warsh’s independence from political influence.

Sen. Elizabeth Warren (D-Mass.) criticized Warsh for shifting his stance on interest rates, noting that his views aligned with Trump’s after the 2024 election. During the 2008 financial crisis, Warsh, then a Fed board member, opposed lowering interest rates to aid borrowing by families and businesses, instead supporting bank bailouts. Warren stated that Trump initially passed over Warsh for Fed chair due to his interest rate stance but later embraced his advocacy for cuts.

Just hours before the hearing, Trump told CNBC’s Squawk Box that he would be disappointed if Warsh did not cut interest rates immediately upon confirmation. Last week, Trump told Fox Business that rates would drop "when Kevin gets in." In December, he asserted that "anybody that disagrees with me" on interest rates would face consequences.