Trump Never Demanded Rate Cuts

The most pointed Kevin Warsh news from Tuesday’s Senate confirmation hearing was his direct answer to the central question senators asked: CNBC confirmed that Warsh told the Senate Banking Committee “The president never asked me to predetermine, commit, fix, decide on any interest rate decision in any of our discussions, nor would I ever agree to do so.”

Kevin Warsh news dominated financial markets Tuesday as the Fed chair nominee faced the most politically charged confirmation hearing since Alan Greenspan. The central question was whether Warsh had made any private commitment to Trump to lower interest rates in exchange for the nomination. His answer was categorical.

“The president never asked me to predetermine, commit, fix, decide on any interest rate decision in any of our discussions, nor would I ever agree to do so,” Warsh said, reading from prepared testimony. He added that monetary policy independence “is essential” and that he would not be a “sock puppet” for Trump. Senator Elizabeth Warren, the ranking Democrat, replied simply: “Adorable. But you know, we need a Fed chair who is independent.”

Trump tested Warsh’s statement within hours. In a live CNBC interview Tuesday morning, Trump told host Becky Quick that he would be “disappointed” if Warsh did not cut rates quickly after confirmation.

What Warsh Said and What Democrats Pushed Back On

Democrats, led by Warren, focused heavily on whether Warsh’s recent shift toward a more dovish rate outlook, from his historically hawkish reputation as a Fed governor from 2006 to 2011, reflected intellectual evolution or political accommodation. Warsh argued that his views on AI as a disinflationary force justified a different rate posture than the one he held during the post-financial crisis period.

Democrats pressed him on Fed Governor Lisa Cook, whom Trump fired. Current Fed Chair Powell publicly defended Cook and called her case “perhaps the most important legal case in the Fed’s 113-year history.” Warsh declined to defend Cook, citing pending Supreme Court proceedings. Senator Angela Alsobrooks of Maryland directly asked whether that silence was consistent with his stated commitment to Fed independence. He replied only that “Fed independence means everything to me.”

The Tillis Blockade and the Only Path to Confirmation

The most concrete obstacle to Warsh’s confirmation is not Democratic opposition but Republican Senator Thom Tillis of North Carolina, who announced he will block the nomination in committee until the DOJ drops its criminal investigation into Powell over Fed headquarters renovation cost overruns. Republicans hold a 12 to 10 advantage on the Senate Banking Committee, meaning Tillis’ defection ties the vote and prevents the nomination from advancing to the full Senate.

Senator Katie Britt of Alabama signaled sympathy for a resolution, urging “everyone involved” to ensure outstanding questions on the renovation matter come to fruition “so that we can get answers and move on.” But Tillis remained firm: “Let’s get rid of this investigation, so I can support your confirmation.” Powell’s term as Fed chair expires May 15, meaning a confirmation gap is now effectively certain unless the DOJ investigation is dropped before that date.

Why Independence Matters for Crypto Markets

The question of Fed independence has direct implications for the CLARITY Act and broader crypto regulatory environment. A Warsh-led Fed that operates genuinely independently of White House pressure on rates would produce more credible monetary policy signals, which reduces the inflation uncertainty that has kept crypto markets range-bound since February. Conversely, a Fed perceived as politically captured would keep inflation expectations elevated and rate cut timelines uncertain, maintaining the macro headwind against all risk assets including Bitcoin.

For crypto reform advocates, the Tillis blockade adds another layer of institutional turbulence to an already crowded political calendar. A confirmation gap between Powell’s May 15 departure and Warsh’s eventual seating creates Fed leadership uncertainty that markets will price across every asset class.