Kevin Warsh told senators at his confirmation hearing on Tuesday that he would keep monetary policy independent from the White House. He also signaled openness to lower interest rates as he seeks to succeed Jerome Powell as Federal Reserve chair. Warsh stated he would be independent of the President and argued that Fed independence ultimately depends on the central bank itself. He noted the Fed’s credibility has been damaged by its failure to contain inflation and by what he sees as mission drift.
Warsh sketched out a different policy framework, arguing the economy is improving and has room to improve further. He criticized the Fed’s balance sheet as unhelpful and said he would prefer interest rates to be the dominant policy tool, suggesting lower rates would benefit more Americans. Warsh also pointed to productivity gains, including from AI, as support for lower rates.
Addressing digital assets, Warsh stated they are already part of the US financial services industry. He previously served as a Fed governor from 2006-2011 and has been a vocal critic of the Fed’s expansion into non-core issues. Before his Fed tenure, Warsh worked at Morgan Stanley and in the George W. Bush White House.