WASHINGTON, D.C. – The President’s pick to be the next Federal Reserve Chairman was in the hot seat on Tuesday, fielding questions from Senators on the Senate Banking Committee about his vision for the Central Bank and on keeping the bank independent from the White House. Kevin Warsh, the President’s nominee, faced tough questions from Senators about the Fed’s independence and his personal finances.
“Monetary policy independence is essential,” said Warsh during his nomination hearing. “Monetary policy makers must act in the nation’s interest. Their decisions are the product of rigor, deliberation and unclouded decision making.”
Trump tapping Warsh comes at a time where elected officials and other monetary experts raise concerns about keeping White House politics separate from the Federal Reserve’s decision making. During his second term, the President has been critical of the Fed’s Board of Governors including Chairman Jerome Powell for their decisions on setting federal interest rates. Warsh maintains that he would not do the President’s bidding.
“The President has repeatedly and illegally attempted to take over the Fed,” said Sen. Elizabeth Warren (D- MA) during the hearing. “His bogus attacks on Governor Lisa Cook and Chair Powell were designed to threaten all of the members of the fed to do Trump’s bidding and open more spots for Trump flunkies.” Warren adds: “He [Trump] wants the Fed to use monetary policies to juice the economy in the short term and this is his last chance to do that before the November elections.”
Republicans advocated for Warsh’s nomination. They said he has the experience to do the job.
“The Federal Reserve must not be ruled by pointy head economists pouring over outdated models and reems of data, it needs a leader,” said Sen. Dave McCormick (R- PA). “It needs a leader who understands the Fed’s mandate of stable prices and maximum employment serves a higher purpose: the preservation of the American dream.”
