Applicant for Fed Chair Wash Denies Commitment to Rate Cuts Under Trump, Stresses Policy Independence and Pushes for Reform
The U.S. Senate Committee on Banking, Housing, and Urban Affairs held a hearing on the Federal Reserve chair nomination on Tuesday, April 21. Kevin Warsh, nominated by President Trump as the next Federal Reserve chair, emphasized that if confirmed, he would make policy decisions independently from the White House while advancing "strong reforms" at the Fed. Warsh also stated that President Trump had never requested any commitment from him regarding interest rate decisions.
Warsh is widely expected to be confirmed by the Senate for the next Fed chair position, though the exact timing remains unclear.
Warsh said that if appointed, he would sell personal assets worth more than $100 million in accordance with ethical guidelines, though he did not disclose specific details. He added that the proceeds would be transferred into "fundamental assets"—investments characterized by simplicity and high transparency.
In terms of policy, Warsh criticized the Fed under Jerome Powell’s leadership for failing to effectively control inflation after the pandemic, resulting in ongoing pressure on American households. He advocated using artificial intelligence and big data tools to enhance inflation monitoring capabilities and reduce public commentary by officials about future interest rate trends.
Warsh said, "What the Fed needs is reform in framework and communication," adding that he supports greater internal debate during policy meetings rather than pre-announcing policy signals.
Emphasizing Monetary Policy Independence but Favoring Long-Term Low Rates
Warsh reiterated that monetary policy independence is crucial, stating that elected officials expressing views on interest rates does not equate to interfering with Fed decision-making. However, he did not explicitly state whether current rate cuts should be implemented, noting that such forward guidance is precisely what he aims to avoid.
At the same time, Warsh said that in the long term, artificial intelligence could boost productivity and create room for lower interest rates, though the short-term validity of this impact remains contested.
Ongoing Inflation Debate with Clear Divisions Over Tariff Impacts
Over the past five years, the Fed has struggled to stabilize inflation around its target level of approximately 2%. Warsh stated he does not believe the Trump administration’s tariff policies have driven up inflation—a view that differs from most Fed officials.
Source: rfi
Original: toutiao.com/article/1863119832026308/
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