WASHINGTON, April 21 (Reuters) - Former Federal Reserve Governor Kevin Warsh on Tuesday takes the next step to becoming the head of the U.S. central bank with a hearing before the Senate Banking Committee, his confirmation ultimately likely but still embroiled in a dispute over a Trump administration criminal probe of Fed Chair Jerome Powell.

The hearing is scheduled to begin at 10 a.m. EDT (1400 GMT) with Warsh, nominated by President Donald Trump to take over for Powell, delivering an opening statement followed by questions from committee members who will decide whether to recommend that the full Senate confirm the 56-year-old financier for a seat on the Fed's seven-member Board of Governors and a four-year term as head of the central bank.

In an opening statement circulated to the media on Monday, Warsh pledged to make interest rate decisions "strictly independent" of political concerns or the comments of elected leaders, while also saying the Fed needed to be more "reform-oriented" and pledging to work "with the administration and Congress on non-monetary matters that are part of the Fed's remit."

"Monetary policy independence is essential," said Warsh, whose nomination came alongside comments from Trump that he wouldn't name someone to lead the Fed who didn't plan to lower borrowing costs.

Warsh has said rate cuts are warranted because technological changes unleashed by artificial intelligence will raise productivity, a view other central bankers say may be true over time but won't necessarily make lowering rates appropriate in the short term, given that inflation remains stubbornly above the Fed's 2% target.

Despite how ongoing tension between Trump and Powell may influence the timing of Warsh's nomination, a spokesperson for Senator Tim Scott, the Republican head of the Senate Banking Committee, said Scott planned to "frame the hearing around affordability," given the Fed's responsibility for keeping inflation stable at the central bank's target.

The Fed has missed its 2% goal for more than five years, first due to the shock of the COVID-19 pandemic but more recently due to the influence of Trump administration tariffs and the high oil prices linked to the war in the Middle East, a potential issue for Republican lawmakers heading into the midterm elections in November.

TIMING OF VOTE UNCERTAIN

When committee and full Senate votes will take place is uncertain.

Republican Senator Thom Tillis, a member of the committee, has said he will block Warsh's nomination until the U.S. Justice Department drops a probe of Powell that the senator regards as frivolous and part of Trump's effort to pressure the Fed into lowering interest rates or force Powell to resign.

Though the policy meeting next week could be Powell's last as Fed chief, the standoff has raised the prospect that he will remain in the job even after his tenure formally expires on May 15.

U.S. Attorney for the District of Columbia Jeanine Pirro, an ally of Trump, does not seem poised to drop the Powell probe, and the president does not appear to be pushing her to do so - even though that stance means potentially living with the current central bank chief for months longer or touching off another legal battle by trying to appoint a temporary replacement from among the other six Fed governors.

In the absence of a confirmed successor for the top job, the central bank in the past has named its own "pro tem" Fed chief. Powell's term as a central bank governor extends until 2028, meaning he could remain as a key policymaker even if Warsh is confirmed.

Trump also has said he still may fire Powell if he doesn't vacate his governor's position. Such a move would surely invite a legal challenge, as did the president's attempt last summer to fire Fed Governor Lisa Cook.

It's an unprecedented situation for the U.S. central bank, where the handoff of authority has typically been collegial, and something Warsh will likely be quizzed about during the hearing.

Warsh, who has added to his already massive family wealth in the 15 years since he left the central bank's board, will have the chance to detail how his extensive criticism of the Fed and its current leadership will translate into a different monetary policy approach or a new way to run a disparate organization.

The Fed has a Washington-based board and staff, but also includes a dozen regional banks, tens of thousands of system-wide employees, and duties that range from setting interest rates for the entire country to managing the payments system, supervising and regulating banks, administering swap lines with foreign central banks, and conducting research on anything from cryptocurrencies to rural health.

Warsh has been deeply critical of Powell's leadership, and the hearing will be an opportunity to explain in more detail what he plans to do differently.

"The Fed must stay in its lane," Warsh said in his opening statement to the committee, echoing a standing conservative critique that the central bank's work on issues like climate change or economic equity, or comments about fiscal spending, were out of bounds.

Republicans, including Tillis, generally have been supportive of Warsh's nomination.

Democrats, meanwhile, say they have a healthy list of issues to raise, from Warsh's role at the Fed during the era of big bank bailouts during the 2007-2009 financial crisis, to why his recent financial disclosures include a promise to divest some of his more than $100 million portfolio rather than more details about the assets he owns.