President Trump announced Friday his intention to nominate Kevin Warsh to chair the Federal Reserve Board, ending months of speculation about his plans for the bank.

Warsh’s experience on the Fed board and Wall Street, close political ties to Republicans and reputation as an independent thinker make it likely he will be confirmed by the GOP-controlled Senate. 

Even so, Warsh still faces questions and obstacles that could delay his journey to the Fed chairmanship.

How long does the Fed criminal probe delay Warsh’s confirmation? 

The Justice Department’s ongoing criminal investigation into the Fed is the most significant obstacle in Warsh’s path to confirmation. 

GOP Sens. Thom Tillis (N.C.) and Lisa Murkowski (Alaska) have both vowed to oppose anyone Trump nominates to the Fed until the DOJ resolves its probe into the bank and Fed Chair Jerome Powell’s handling of building renovations.

Tillis reiterated his pledge in a Friday morning statement, in which he praised Warsh’s nomination but insisted he could not currently support the nominee or any other Fed pick.

“Kevin Warsh is a qualified nominee with a deep understanding of monetary policy. However, the Department of Justice continues to pursue a criminal investigation into Chairman Jerome Powell based on committee testimony that no reasonable person could construe as possessing criminal intent,” Tillis said.

“Protecting the independence of the Federal Reserve from political interference or legal intimidation is non-negotiable,” he continued. “My position has not changed: I will oppose the confirmation of any Federal Reserve nominee, including for the position of Chairman, until the DOJ’s inquiry into Chairman Powell is fully and transparently resolved.”

Tillis also sits on the Senate Banking Committee, which would also allow him to delay Warsh’s approval by the broader panel. But both he and Murkowski could ultimately be overruled by the rest of the Senate GOP’s 52 other members, who alone would be more than enough to confirm Warsh.

When asked if the Powell investigation should continue, Trump sidestepped the question, reiterating what he sees as problems with a multi-million renovation of the Fed building.

“We’re going to find out,” Trump said, describing what he sees as problems with the project that could determine incompetence or “theft.”

Will any Democrats support Warsh?

The Trump administration’s criminal probe into the Fed and its effort to fire Fed board member Lisa Cook have enraged Democrats and stirred up opposition to the president’s agenda for the central bank.

Warsh was already unlikely to receive much support from Senate Democrats given his opposition to stimulus during the financial crisis and close political ties both to Trump and the Republican Party at large. 

Trump’s efforts to influence the Fed and weaken its independence have made it even harder for Democrats to back Warsh while fueling criticism from his liberal detractors.

“Donald Trump said anybody who disagrees with him will never be Fed Chairman. Former Fed Governor Kevin Warsh — who cared more about helping Wall Street after the 2008 crash than millions of unemployed Americans — has apparently passed the loyalty test,” said Sen. Elizabeth Warren (Mass.), top Democrat on the Senate Banking Committee, in a Friday statement.

“No Republican purporting to care about Fed independence should agree to move forward with this nomination until Trump drops his witch hunts of the current Chairman of the Federal Reserve and Governor Lisa Cook.” 

Trump on Friday attempted to put some distance between himself and Warsh, telling reporters at the White House that he had not discussed rate cuts with his nominee, calling that “inappropriate.”

But Trump has hammered his desire for rates cuts for much of the last year. Still, he said he expected Warsh to cut rates if he is confirmed.

How does Warsh address concerns about Fed independence?

While Tillis and Murkowski are the only Republicans willing to block Warsh for now, they’re far from the only Senate GOP members concerned about Trump’s impact on Fed independence.

Trump has repeatedly complained about his lack of input into Fed interest rate decisions under Powell, and would be able to remake the Fed board in his image if the Supreme Court approves his attempt to fire Cook.

Warsh had previously accused the Fed under Powell of using independence as a shield from accountability, and said members of the bank should “grow up” and “be tough” in the face of criticism.

Warsh also called for much lower interest rates in October, and criticized the Fed for “working at cross-purposes with the president’s policies.”

“We can lower interest rates a lot, and in so doing get 30-year-fixed-rate mortgages so that they’re affordable, so that we can get the housing market going again,” Warsh said in an interview with Fox Business’s Larry Kudlow.

“We’ve seen a sea change in the White House on policies. A sea change at the Treasury, going to Secretary [Scott] Bessent. We need the same kind of sea change at the Federal Reserve.”

His views on Fed independence are likely to be a major focus of his confirmation hearing before the Senate Banking Committee and the primary issue for any moderate Democrat who may consider supporting Warsh.

“It is difficult to trust that any Chair of the Federal Reserve selected by this president will be able to act with the independence required of the position, knowing that this administration will levy charges against any leader who makes interest rate decisions based on facts and the needs of our economy rather than Trump’s personal preferences,” said Sen. Mark Warner (D-Va.) in a Friday statement.

Do Warsh’s past views come back to haunt him?

Warsh has spoken out in favor of much lower interest rates, aligning himself with Trump’s call for steep cuts and rage with the Powell Fed for failing to deliver them.

But during his stint on the Fed board from 2006 to 2011, Warsh was known for supporting higher rates and his aversion to stoking inflation through more stimulus. 

“He served on the Fed board during the Great Recession and was one of the loudest voices at the time worried about inflation, which did not materialize. But that past suggests he will be mindful not to let inflation come back again now, especially after the 2022 spike the nation has just lived through,” wrote Heather Long, chief economist at Navy Federal Credit Union, in a Friday analysis.

A 2022 op-ed Warsh wrote in favor of a digital dollar, an idea fiercely opposed by most Republicans, could also emerge as a potential headache. Warsh, however, could turn to the precedent set by Powell, who said the Fed would not issue a digital currency unless explicitly ordered to under law.

Does Powell stick around as a Fed board member?

Powell’s term as Fed chair ends in May, but his separate term as a member of the Fed board doesn’t end until 2028. Whether Powell chooses to stay beyond his chairmanship could have several implications for the Fed.

Powell taking up a seat on the Fed board for two more years would prevent Trump from replacing him with a friendlier appointee until the final year of the president’s second term. That could impede Warsh’s efforts to sway the Fed toward lower interest rates if Powell is not also on board.

More immediately, Trump would have to appoint Warsh to the Fed governor term currently held by Stephen Miran, who is on leave from the White House, and prevent his top economist from staying on the Fed beyond May.

“We have long believed that Powell will step down from the board after Trump formally nominates a successor because that is what’s traditionally done at the Fed/” wrote Ian Katz, director at research  firm Capital Alpha Partners, in a Friday analysis.

“However, we think the DOJ’s investigation of Powell and his defiant response have increased the chances that he stays on. The answer might depend on whether he thinks Warsh will defend the concept of Fed independence.”