‘sock Puppet’: Warsh, Warren Clash Over Financial Disclosure, Fed Independence

Sen. Elizabeth Warren sharply questioned Kevin Warsh over his financial assets and his willingness to break with President Donald Trump in a contentious opening to a hearing on the future of the Federal Reserve’s leadership.

“Donald Trump has made clear that he does not want an independent Fed,” the Massachusetts Democrat said, shortly after expressing dissatisfaction with the Fed chair nominee's characterization of how he would divest more than $100 million of financial assets if confirmed by the Senate. “And he’s made clear that you are his sock puppet.”

The combative line of questioning from the committee’s top-ranking Democrat underscores the uphill battle Warsh will face in securing Democratic support for his bid to replace Jerome Powell as the head of the central bank. Questions about whether the next chair would be able to keep his distance from Trump on rate policy have percolated throughout the selection process.

And while Warsh’s background as a former Fed governor and alliances with Wall Street leaders have assuaged some lawmakers, he did not provide Warren with a substantive example of how he might break with the president on policy.

“The Federal Reserve in recent years has wandered outside its remit,” he said, responding to a question from Warren on whether he disagreed with any component of the president’s economic agenda. “That’s not something I’m prepared to do.”

Warren had telegraphed that she had deep concernswith Warsh's financial paperwork, which revealed more than $100 million of assets across myriad private investment funds, as well as stakes in tech startups like Elon Musk’s SpaceX and the prediction markets platform Polymarket.

While Warsh has signed an agreement to divest “virtually all” of those assets within 90 days of being confirmed, and prior to taking the oath of office, Warren took issue with his refusal to provide details on those assets and how they would be divested.

“It’s critical that the next chair have no financial conflicts — none,” she said.