Will Waller make it through "safely" tonight? New Federal Reserve News Agency: Asset disclosure may become a key factor

A hearing, two obstacles—financial transparency and partisan rivalry—are weighing simultaneously on Walsh’s confirmation process. Walsh’s confirmation hearing is scheduled for Tuesday, April 21. On April 20, “the new Fed press agency,” Nick Timiraos and reporter Matt Grossman jointly wrote that Democratic lawmakers have internally circulated a Senate Banking Committee staff memorandum targeting alleged “opacity” in Walsh’s financial disclosures. Meanwhile, a Republican senator’s “defection” has made Walsh’s confirmation prospects even more uncertain. Current Federal Reserve Chair Powell's term will expire on May 15. The window is open, but whether Walsh can smoothly take over remains uncertain. Financial Disclosure: Over $100 million, but the details are unclear Last week, Walsh submitted his pre-confirmation financial disclosure, revealing total assets exceeding $100 million. The issue: his largest single investment—a stake in investor Stanley Druckenmiller’s "Juggernaut" fund—did not disclose underlying holdings, citing a confidentiality agreement. The U.S. Office of Government Ethics (OGE) gave only a “conditional certification” for the document, clearly stating that it was not fully compliant for “dozens of holdings” and requiring Walsh to divest relevant assets before assuming office. Walsh has promised to sell those assets upon confirmation. Democrats’ Core Concern: Does He Hold Stock in Regulated Banks? Federal law explicitly prohibits Fed officials from owning shares in banks they regulate. This red line is the core basis for Democrats’ pressing questions. Democratic Senate Banking Committee staff wrote in their memorandum: “Without public, detailed scrutiny of Mr. Walsh’s holdings, it is impossible to determine whether he has interests in institutions he would supervise as Fed Chair.” Democrats’ specific concern targets the Juggernaut fund. According to the staff memo, the fund appears to have recently held shares in banks regulated by the Fed. Two listed banks—Berkshire Hills Bancorp and Investar Holding—both disclosed in public documents over the past two years that Juggernaut is a shareholder. As a private fund, Juggernaut does not publicly disclose its holdings. Walsh’s investment in the fund is reportedly at least $100 million, according to the disclosure. Former White House Ethics Lawyer: Concerns “Understandable,” but Trusts Walsh Personally Regarding this arrangement, Richard Painter, former chief ethics lawyer in the Bush administration, offered a balanced view. Painter stated that it’s not uncommon for senior federal nominees to agree to divest private investments before taking office to comply with ethics regulations. He also revealed that he assisted with Walsh’s financial disclosure when Walsh was first confirmed at the Fed in 2006, saying, “I trust Walsh to handle the divestiture properly.” But he also admitted senators’ concerns are “understandable” due to what he described as the second Trump administration’s “indifferent attitude” toward ethics compliance. Painter said frankly, “If it were someone I didn’t know and didn’t trust, in the context of this administration, I’d say—‘Absolutely not.’” Republican Roadblocks Beyond Democrats’ questions, Walsh also faces resistance from within the Republican Party. North Carolina Republican Senator Thom Tillis has made it clear that he will not support Walsh until the Department of Justice’s criminal investigation into Powell is resolved. Recently, prosecutors appear to be intensifying their investigation, making the situation more complicated. This means that even though Republicans hold the majority in the Senate, Walsh’s confirmation is far from certain. Tillis’s “hold” adds unpredictability to Walsh’s path toward the Fed’s top job. Democrats led by Senate Banking Committee ranking member Elizabeth Warren are expected to strongly question Walsh at Tuesday’s hearing—with clear logic: they are already highly cautious about confirming a Fed Chair nominated by a president who has repeatedly challenged central bank independence. Other Potential “Minefields”? According to the staff memo seen by Nick Timiraos, Democrats’ scrutiny may not be limited to financial disclosures. Walsh’s role in banking bailout negotiations during the 2008-2009 financial crisis, as well as his close relationships with Druckenmiller and other Wall Street investors, may also become focal points at the hearing. Additionally, last Friday Walsh proactively updated his financial disclosure, committing to sell an index fund tracking the Canadian stock market. In the document, he explained that ethics officials advised him that, as Fed Chair, his work might affect assets held by the fund, and thus he decided to divest. This proactive disclosure shows certain compliance intentions and indirectly confirms that public concerns about his complex holdings are not unwarranted. Risk Disclaimer and Terms The market has risks, investment needs caution. This article does not constitute personal investment advice and does not take into account individual users’ specific investment goals, financial status, or needs. Users should consider whether any opinions, views, or conclusions herein are suitable for their particular circumstances. Investments made based on this article are at your own risk.