Senator Elizabeth Warren Blasts Kevin Warsh as 'Trump Sock Puppet' in Fiery Fed Hearing

Confirmation hearings for Federal Reserve chairs are usually staid, rubber-stamp affairs. Not this one.

Democrats and one key Republican from the Senate Banking Committee repeatedly attacked President Donald Trump; his pick for Fed chair, Kevin Warsh; and at times, both, in a fiery hearing that included questions about an undisclosed $100 million in investments, accusations of pressure from the White House … and lots of Seinfeld references.

The Republican-majority committee and broader Senate will nevertheless probably confirm Warsh. But an ongoing criminal investigation of current Fed Chair Jerome Powell and his oversight of an expensive renovation of the central bank is set to hold up the vote.

Democratic Sen. Elizabeth Warren called Warsh “uniquely ill-suited” for the job, accusing him of acting as a “sock puppet” for Trump, who has said he would only choose a Fed chair who will cut rates. Warsh strongly defended his independence from politics, trying to fend off tough questions about his financial disclosures and recent reversal on setting interest rates.

Among the key questions: why Warsh failed to disclose any details about more than $100 million in assets. Warsh declined several times to say what those assets were, naming only the private funds in which they were held. He also said he would follow government ethics guidelines and convert his assets into something “vanilla,” resembling cash, within the required timeframe after his confirmation.

That didn’t appease Democrats, who peppered Warsh with questions about whether he had undisclosed conflicts of interest. Committee Democrats also questioned Warsh about his long record of inflation hawkishness – a preference for keeping interest rates high to combat inflation – a position he has since reversed. Trump, who wants rates low, has said Warsh would help slash rates as Fed chair. (Warsh would only be one of a dozen votes on interest rate policy, but, as chair, he could have outsized influence over the board.)

Warsh said Trump never asked him to commit to lower rates. He also said he would do what was appropriate for the economy, irrespective of politics, and thus declined to say what rate-setting policy he believed the Fed, under his leadership, would enact.

He also refused to answer several questions that he viewed as “political” – including whether whether Trump lost the 2020 election.

Warsh offered some criticism of the institution he could be about to take over. He said the Fed has repeatedly failed to help the public manage the high cost of living and so it needs a new “inflation framework.”

Although Warsh didn’t outline that framework, exactly, he called for “regime change in the conduct of policy” at the Fed, echoing a term Trump has used repeatedly about the leadership of Iran during the war there.

Warsh said the Fed had become too transparent in some respects. For example, Fed officials anonymously offer quarterly predictions about interest rates that they may feel inclined to stick to, even if the economy changes significantly.

Warsh also suggested the Fed may not need to meet with such frequency. It currently meets every six weeks.

He also criticized the Fed for predominantly using only two blunt tools to help aid its dual mandate to keep inflation and unemployment in check. The Fed sets rates, which “affects the whole economy,” and it buys or sells assets (usually Treasury bonds).

Because adding those assets to the Fed’s balance sheet,“disproportionately helps those with financial assets,” Warsh said he prefers to use interest rate changes. But he also said the Fed needs “new tools,” without specifying what those tools may be.

Warsh’s chances for confirmation in the near future appear to be near zero – and that has nothing to do with his qualifications or his answers to tough questions.

Republican Sen. Thom Tillis said he wouldn’t confirm Warsh – whom Tillis said was qualified for the job – because of the Trump administration’s ongoing criminal investigation of Powell and his oversight of the expensive renovation of the Fed’s headquarters. Tillis said that investigation clouded the confirmation hearing with politics, preventing him from supporting any candidate until the probe was resolved.

Warsh was asked about other political matters, including whether he would defend Fed Governor Lisa Cook, whom Trump has tried to fire over unsubstantiated allegations of mortgage fraud. Powell has offered a full-throated defense of Cook, but Warsh said Tuesday he would defer to the Supreme Court’s decision on the constitutionality of Trump’s ability to fire her. (That verdict could come in the following days or weeks.)

Even the choice of Republican Sen. Dave McCormick to introduce Warsh was political. McCormick is Warsh’s friend, a former hedge fund executive and a respected senator on both sides of the aisle. His selection was meant to convey Warsh’s bona fides and politically neutral stances.

That failed to bring committee members together. What did? A boatload of Seinfeld references and jokes, after Warsh admitted he had never seen the hit sitcom.

Yadda, yadda, yadda, he’ll get confirmed eventually. The question is when.

Explore: NBCPalmSprings.com, where we are connecting the Valley.