Kevin Warsh, President Donald Trump’s pick for chairman of the Federal Reserve, said in his confirmation hearing that Trump never asked him to commit to any interest rate decisions during his vetting process.
Warsh, a 56-year-old former Fed governor, testified on Tuesday before the Senate banking committee, where he faced questions about Fed independence and monetary policy. During the hearing, Warsh vowed to uphold Fed independence despite the pressure Trump has put on Fed Chairman Jerome Powell to lower interest rates.
KEVIN WARSH PLEDGES TO UPHOLD FED INDEPENDENCE IN PREPARED TESTIMONY
Sen. John Kennedy (R-LA) asked specifically whether he agreed with the president to lower interest rates if he is confirmed and becomes head of the central bank.
“Senator, I’m glad you framed it that way — the president never asked me to predetermine, commit, fix, decide on any interest rate decision in any of our discussions, nor would I ever agree to do so,” Warsh testified.
“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,” Warsh added after further questioning.
The Wall Street Journal reported late last year that, during an interview, Trump pushed Warsh on whether he could trust him to support rate cuts.
“He thinks you have to lower interest rates,” Trump said of his now-Fed nominee. “And so does everybody else that I’ve talked to.”
Fed independence has become a major issue recently. Trump has been pushing Powell to cut interest rates since the president entered his second term, but Powell has resisted, emphasizing the independent nature of the central bank.
Powell announced this year that he was being investigated by the Justice Department for claims he made about the Fed headquarters renovation during congressional testimony. But he argued that the inquiry is an effort by Trump to influence interest rate policy.
Sen. Thom Tillis (R-NC), a member of the banking committee, has threatened to block Warsh until the legal probing into Powell has concluded. He reiterated that stance during the Tuesday hearing.
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Still, Tillis said he is supportive of Warsh and believes him when he says he intends to lead the central bank independently of the president.
“Let’s get rid of this investigation so I can support your confirmation,” Tillis said.
