Warsh commits to monetary policy independence, says president expressing views on rates isn't a threat

Federal Reserve chair nominee Kevin Warsh will tell Senate lawmakers Tuesday that setting interest rates independently is “essential,” but that the president’s views on monetary policy don’t threaten central bank independence.

“Let me be clear: monetary policy independence is essential,” Warsh wrote in prepared remarks. “Monetary policymakers must act in the nation’s interest . . . their decisions the product of analytic rigor, meaningful deliberation, and unclouded decision-making.”

Warsh, who will give his opening statement before the Senate Banking Committee before facing questioning, wrote that he does not believe the “operational independence of monetary policy is particularly threatened when elected officials — presidents, senators, or members of the House — state their views on interest rates.”

But President Trump has done far more than state his views. In speeches, press conferences, and Truth Social posts, he has demanded lower interest rates and lambasted current Chair Jerome Powell, mocking him as “too slow,” “too late,” “incompetent,” and “crooked.”

*Read more:** How much control does the president have over the Fed and interest rates?*

His Justice Department opened a criminal inquiry into whether Powell lied to Congress about renovation costs at the Fed headquarters, a move Powell said was designed to pressure the central bank to lower rates.

In his prepared remarks, Warsh says he believes central bankers must be strong enough to listen to a diversity of views, but that Fed independence is largely up to the Fed.

Warsh, 56, was a Fed governor from 2006 to 2011 and earlier served as special assistant to the president for economic policy and executive secretary of the White House National Economic Council. He is currently a visiting fellow in economics at the Hoover Institution, a conservative think tank.

## Mum on interest rates

Largely absent from Warsh’s opening testimony is any mention of his current views on monetary policy. A review of his speeches during his Fed tenure and transcripts of policy meetings paints a picture of an inflation hawk by philosophy but a data-driven practitioner. As a governor on the Federal Open Market Committee, Warsh joined the committee's consensus on every vote and never dissented. That included three rate hikes when he first came on in 2006.

More recently, Warsh has advocated lower interest rates, arguing that the Fed should "discard its forecast of stagflation" and predicting that AI will be a "significant" force that boosts productivity and lowers inflation, allowing for lower rates.