Fed independence is up to the Fed, Warsh sayspublished at 17:02 BST 21 April
17:02 BST 21 April
Anthony Zurcher
North America correspondent
Looming over today’s confirmation hearings is Donald Trump’s repeated demand that the Federal Reserve lower inflation rates – and his complaint that it has been too reluctant to do so during his first year back in the White House.
Lower rates would ease the cost of borrowing, juicing US economic growth, improving public confidence and, the president hopes, leading to a political windfall for Republicans.
He has given current Fed Chair Jerome Powell the nickname “too late” for his reluctance to lower rates in the face of persistent inflation. And early today, he said he would be “disappointed” if Warsh didn’t quickly lower rates upon his confirmation.
At least so far today, Warsh has seemed more concerned with the dangers of inflation than with rate cuts. He said the Fed made a “fatal policy error” in 2020, which he said let higher inflation “take hold” and that Trump has never asked him to “predetermine, commit, fix, decide on any interest rate decision”.
Presidents, he said, always want lower interest rates. The difference with Trump is that he makes his views very public.
“But Fed independence is up to the Fed,” he concluded.