Warsh Denies Being Trump's 'Sock Puppet' in Heated Fed Confirmation Hearing

Federal Reserve chairman nominee Kevin Warsh denied making any deals with President Trump on interest rates and rejected accusations he would serve as the president's "sock puppet" during a contentious confirmation hearing Tuesday before the Senate Banking Committee.

Senator Elizabeth Warren, the committee's ranking Democrat, launched the sharpest attack on Warsh's nomination. "Having a sock puppet in charge of the Fed would give the president access to the Fed's powerful authorities to enrich himself, his family and his Wall Street buddies," Warren said. When asked directly if he would be Trump's sock puppet, Warsh responded: "Absolutely not."

The former Fed governor emphasized that central bank independence "is essential" and pledged to preserve the Fed's self-governance if confirmed. His testimony came just hours after Trump told CNBC he would be "disappointed" if Warsh failed to immediately cut rates upon confirmation.

Warren also grilled Warsh about potential ties to convicted sex trafficker Jeffrey Epstein. The nominee has disclosed hundreds of millions in financial holdings, including an investment fund worth at least $100 million where the underlying assets remain undisclosed. Warren demanded to know if the funds "invest in any companies affiliated with President Trump or his family, companies that have facilitated money laundering, Chinese-controlled companies or financing vehicles established by Jeffrey Epstein."

Warsh declined to answer directly but said he planned to divest his holdings if confirmed. His name appears multiple times in Justice Department Epstein files, though simply being mentioned in the records does not imply wrongdoing.

The nominee flatly denied cutting any deals with Trump over monetary policy. "The president never once asked me to commit to any particular interest rate decision, period, and nor would I ever agree to do so if he had, but he never did," Warsh testified. Senator Ruben Gallego of Arizona noted that the Wall Street Journal reported last year that Trump pressed Warsh at a meeting to reduce borrowing costs.

The Federal Reserve's interest rate decisions directly impact mortgages, car loans, and business borrowing costs for millions of Americans. Trump has repeatedly argued that lower rates are necessary to boost economic growth, putting pressure on Fed independence that has been maintained for decades.

While support and opposition largely fell along party lines, Senator Thom Tillis became the lone Republican to withhold backing for Warsh's nomination, potentially complicating the confirmation process. As Insider Wire previously reported, Warsh has faced mounting scrutiny over his ability to maintain Fed independence under Trump's influence.

The Banking Committee has not yet scheduled a confirmation vote, but Warsh will need majority support to advance to a full Senate vote where Republicans hold a slim majority.