WASHINGTON– Kevin Warsh promised Tuesday to keep politics out of Federal Reserve decisions if confirmed to serve as the chair.
The pledge came during a nomination hearing where senators asked about Warsh’s independence from President Donald Trump.
“Presidents want lower rates, but Fed independence is up to the Fed,” Warsh said. “Fed leadership has to make a decision about what’s the right thing to do.”
But Sen. Elizabeth Warren, D-Mass., questioned how independent Warsh would be from a president who has made his wishes for Fed policy so publicly known.
“In fact, he [Trump] just said, and I quote, ‘anybody that disagrees with me will never be a Fed chair.’ And he’s made clear that you are his sock puppet, saying last week that interest rates will drop, quote, ‘when Kevin gets in,’” Warren said.
“Are you going to be the president’s human sock puppet?” another senator quickly followed up.
“Senator, absolutely not,” Warsh answered.
Trump has threatened to fire current Federal Reserve Chair Jerome Powell if he doesn’t quit by the end of his term on May 15. After Trump’s Department of Justice opened an investigation looking into Powell, Trump nominated Warsh to take his place. Powell said he won’t step down until Warsh is confirmed.
In the hearing, Chairman Tim Scott, R-S.C., defended Warsh along with other Republican senators, including Thom Tillis, R-N.C., who has refused to vote for any Trump nominee until the investigation is over.
“I think you’re going to be independent,” Tillis said. “You have to be.”
But Tillis said he wants to end the DOJ investigation and has a problem with federal prosecutors “thinking it would be cute to bring Chair Powell under an investigation just a few months before the position was going to be open.”
During the hearing, several Democrats questioned Warsh’s independence from Trump, his view on interest rates and his undisclosed assets.
“I am concerned that your position on interest rates seems to shift with what’s politically convenient, rather than based on sound economic judgment,” Sen. Chris Van Hollen, D-Md., said during his questioning.
Warren questioned Warsh on his political views of Trump, asking questions like, “Did Mr. Trump lose the 2020 election?” and if there are any of Trump’s policies that Warsh disagrees with.
“I’m just asking a factual question. I need to know. I need to measure your independence and your courage,” Warren said.
Warsh did not answer directly.
At another point in the hearing, he promised to divest most of his assets.
“So that there’s no question about my independence, no question about the clarity of my financial record,” Warsh said, “I agreed to divest virtually all of my financial assets, the large majority of which will be divested before I raise my right hand to be sworn into office by this body.”
On why Warsh wanted to become the Federal Reserve Chair, he said, “I live the American dream.”
“I’m honored to serve if this body will confirm me,” he said.