Fed's Warsh says he has repeatedly told Donald Trump he is independent

Federal Reserve Chairman Kevin Warsh said President Donald Trump has not tried to influence monetary policy and reaffirmed his commitment to the central bank's independence

Federal Reserve Chairman Kevin Warsh said President Donald Trump — who has long called for sharp cuts in US interest rates — has not tried to interfere with the central bank and would not succeed if he attempted to do so.

 

"I just don't want to be in the business of sharing discussions that the president and I have," Warsh said in response to a question at a Senate Banking Committee hearing on Wednesday on whether he had communicated with Trump since taking charge of the Fed.

 

"I will tell you what I've said to the president repeatedly, and said to the Treasury secretary: They chose an independent guy to do an independent job, and that's exactly what I plan on doing," Warsh said.

 

 

Pressed by Democratic Senator Chris Van Hollen, Warsh said the president "has not — before I took this office, before I raised my right hand — he has not tried to influence the conduct of monetary policy."

 

"And if he tried to, I would continue to keep my head down and do the job," he added.

 

Warsh also said he would follow past precedent in revealing his calendar.

 

Warsh was nominated to lead the Fed by Trump and took office in May. At its first policy meeting under his leadership last month, the central bank kept interest rates unchanged amid price pressures stemming from the war in Iran.

 

While government data released this week showed that measures of consumer and producer price inflation eased in June, inflation remains well above the Fed's 2 per cent target.

 

Van Hollen said he hoped Warsh would "follow precedent". Former Chair Jerome Powell, who remains on the Fed Board, ignored Trump's calls to cut interest rates and criticised the administration for attempting to exert political pressure on the central bank.

 

The president last month reiterated his view that "we need low interest rates". But economists and investors have predicted the Fed may have to raise rates this year because of inflationary pressures driven by higher energy costs and the build-out of artificial intelligence (AI) infrastructure.