Warsh wins confirmation as Fed chair, with inflation on the march

The US Senate on Wednesday voted to confirm Kevin Warsh as the chair of the Federal Reserve, paving the way for the lawyer, financier and former central-bank governor to take the reins of the Fed.

Warsh, aged 56, will take over with inflation rising and markets grappling with the likely course of central-bank policy while President Donald Trump demands lower interest rates.

A surge in oil prices since the start of the Iran war has swung investor expectations toward a possible rate increase by year-end. The Fed's current target range for short-term borrowing costs is 3.50 per cent to 3.75 per cent.

The Senate on Tuesday confirmed Warsh to a 14-year term as Federal Reserve governor and set the path for the vote to approve Warsh for a concurrent four-year term as Fed chair. His swearing-in to both positions awaits final White House signatures on paperwork sent by the Senate. Jerome Powell's term as chair ends on Friday.

Warsh says he plans "regime change" at the Fed, including tightening its coordination with the Treasury Department and the Trump administration on non-monetary policies and setting it on course for a smaller balance sheet, which he argues should allow for a lower policy rate.