Kevin Warsh told the Senate Banking Committee on Tuesday he would not serve as President Trump's "sock puppet" at the Federal Reserve, denied cutting any deal with the White House on interest rates, and refused to say whether his undisclosed holdings touch vehicles tied to Jeffrey Epstein, in a two-and-a-half-hour hearing that left his nomination alive but short of the votes needed to replace Chair Jerome Powell by May 15.

Warsh cleared questions on his finances and his relationship with Trump by refusing to engage on specifics, and used a third line of questioning to preview what he called a "new inflation framework" and an end to forward guidance. Sen. Thom Tillis, R-N.C., the retiring Republican whose vote the committee needs, reiterated that he will not clear Warsh until the Justice Department drops its criminal probe of Powell over Fed building renovations.

On Epstein and the money

Sen. Elizabeth Warren, D-Mass., the committee's ranking Democrat, pressed Warsh on more than $100 million in investments he has not itemized, including a vehicle she identified as the Juggernaut Fund and an entity called THSDFS LLC. Warren asked whether either held stakes in companies affiliated with Trump or his family, firms tied to money laundering, Chinese-controlled companies, or "financing vehicles linked to Jeffrey Epstein." Warsh declined to answer directly, saying he had agreed to divest all assets before taking the oath. BBC reported Warsh's name appears several times in the Justice Department's Epstein files, though appearing in the records does not imply wrongdoing.

Warren told Warsh she would take his refusal to describe how he planned to divest "as a no." Pressed separately on whether Trump lost the 2020 election, Warsh answered, "This body certified the election." Asked to name one Trump economic policy he disagreed with, he replied that the president "said I looked like I was out of central casting. I think I’d look older and grayer."

On rates and independence

Warsh denied Trump had sought any commitment on interest rates as a condition of the nomination. "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," he told the committee. The hearing opened minutes after Trump told CNBC he would be "disappointed" if Warsh did not cut rates immediately.

Sen. Jack Reed, D-R.I., offered a sharper summary. "I must commend you on the way you can circularly go around questions and not answer them," Reed said. "It's a skill. Unfortunately, it's not a good skill for the chairman of the Federal Reserve Board."

Regime change intact

What Warsh did push, largely without challenge, was an overhaul of the Fed's operating model. He called the Personal Consumption Expenditures price index a "rough swag as to what was going on" with prices and said the Fed should move off it. He criticized forward guidance as "unhelpful," said he preferred "messier" Fed meetings without "rehearsed scripts," and declined to commit to continuing the regular post-meeting press conferences the Fed has held since the 2008 crisis.

Former Fed Chair Janet Yellen told CNBC she doubts the Federal Open Market Committee would go along. "I really don't see the FOMC accepting this in the short run," Yellen said. Warsh would need a majority of the 11 other voting members to change rates.

The counterpoint

Warren's objection is the Democratic case against the nomination: a nominee who will not itemize $100 million in holdings, will not say whether Trump lost in 2020, and will not name a single policy disagreement with the president cannot credibly run an independent central bank. She accused Warsh of having "worked tirelessly to arrange multibillion-dollar bailouts" for Wall Street chief executives during his 2006-to-2011 tenure as a Fed governor. Warsh said he had no regrets.

Powell's term as chair expires May 15, and he has said he will stay beyond that date if no successor is confirmed. Tillis's block, paired with the DOJ probe he wants dropped, makes that outcome likelier by the day. A committee vote has not been scheduled.