President Donald Trump has long had a bone to pick with the Federal Reserve. Earlier this year, the Justice Department launched a criminal probe against then-Fed Chair Jerome Powell that was intended to force him out. Even after Powell was succeeded as chair by Kevin Warsh, the president has never let up in his quest to bludgeon the central bank into lowering interest rates.
“I’m a smart voice and should be listened to,” Trump told The Wall Street Journal late last year.
Warsh is about to enter the sixth month of his tenure helming the Fed. Both during and since his confirmation, he has faced scrutiny over his independence from the executive branch, but so far he has demonstrated he’s serious about fighting inflation. Now the Fed can count on new armor against Trump’s temper: A Democratic-controlled Senate.
GOP control of the Senate meant senators had to accede to Trump’s demands on nominees.
Though the inflation rate is well above the Fed’s 2% target, Trump has long argued the Fed should lower interest rates. As recently as September, after the Fed raised rates to a range of 3.75%-4.00%, the president said rates should be at 1% “or less.” With at least 54 seats after this week’s midterm elections, Senate Democrats are poised to deal a blow to the president’s goal.
Interest rates influence the cost of personal loans, auto loans and mortgages for American families. It also affects how much interest the U.S. government pays on its towering national debt. They are set by the Federal Open Market Committee — and of the FOMC’s 12 members, seven are also members of the Fed’s Board of Governors. Those seven positions are all presidential appointments, subject to Senate confirmation.
GOP control of the Senate meant senators had to accede to Trump’s demands on nominees. When Fed governor Adriana Kugler resigned in August 2025, Trump tapped economist Stephen Miran to temporarily replace her, even though Miran was already chair of the White House Council of Economic Advisers. It took a little over a month for Senate Republicans to process Miran’s nomination in a chamber that isn’t exactly famed for its swiftness.
Once the Senate switches hands on Jan. 3, the White House is deprived of its ability to nominate acolytes to the Fed board. Wall Street and economists no longer have to get squeamish about the possibility of a “goldbug” getting nominated to a position dictating monetary policy or an inept loyalist who puts Trump first, and the U.S. economy second. It also lets Republicans off the hook from having to stomach unqualified nominees out of an unwillingness to stand up to Trump.
Warren will have jurisdiction to oversee the central bank and block unimpressive nominees who lack the necessary credentials to execute the Fed’s mission.
New guards will be posted outside the Fed’s gates. Just look to who’s next in line to helm the Senate Banking Committee: Sen. Elizabeth Warren of Massachusetts, who has developed a reputation over the years as a crusader against corruption, corporate consolidation and wealth inequality. She hasn’t spared the Fed either, particularly when it eases up on supervising the banking sector. Warren called Powell “a dangerous man” to his face during his Senate renomination hearing in late 2021 over his views on financial regulation. Five years later, she branded Warsh as “a sock puppet” for Trump and voted against his nomination alongside the vast majority of Democrats.
Warren will have jurisdiction to oversee the central bank and block unimpressive nominees who lack the necessary credentials to execute the Fed’s mission. Her fellow Democrats are virtually certain to side with her, including former Banking Committee Chair Sherrod Brown, the Ohio progressive who wishes to return to the panel after a two-year absence from the Senate. We can expect pyrotechnics in the committee room if the White House insists on putting forward Fed nominees with conflicts of interest or other disqualifying attributes.
The Fed does have one short-term challenge to the firewall with the executive branch. Trump hasn’t backed down from efforts to oust Fed governor Lisa Cook — appointed by former President Joe Biden — over unproven allegations of mortgage fraud. Federal courts, including the Supreme Court, have repeatedly blocked those efforts, but the White House scheduled a hearing about her case next month.
Now, however, Democrats would confirm any replacement for Cook. Warsh is more free as well to be even aggressive in corralling votes for rate hikes if he deems it necessary. He doesn’t have to worry about Trump breathing down his neck, something that Powell was always keenly aware of in his fight to keep the Fed as-is.
“Our credibility has been built and sustained over many decades, and we have a duty to safeguard that priceless asset for our fellow citizens and for generations to come,” Powell said in a May speech shortly after stepping down as Fed chair.
The United States is no longer at risk of joining a group of nations that ended the autonomy of central banks like Argentina, Turkey and Venezuela to disastrous financial consequences. It’s a clear win for Americans upset at the spiraling cost-of-living, and a defeat for a president who often prizes loyalty above all.
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