Kevin Warsh Testifies on Federal Reserve Independence and Inflation Responsibility

Kevin Warsh, who was picked by President Donald Trump to lead the Federal Reserve, plans to tell the Senate Banking Committee that it’s vital for the Fed to keep its independence in monetary policy, but it needs to back this up with the right actions. He cautions that the Fed risks losing its autonomy by getting involved in fiscal and social issues that aren’t its job. Warsh makes a clear distinction between the independence of monetary policy and other responsibilities like bank oversight. He points out that the Fed must take responsibility for inflation, arguing that low inflation is crucial for safeguarding low-income families, while rising prices hurt them. Warsh also criticizes the Fed for overstepping its bounds since the 2008 crisis. He served on the Fed's Board from 2006 to 2011 and now works at Stanford's Hoover Institution. His nomination is being challenged by Republican Senator Thom Tillis, who plans to block it until an investigation into the Fed's renovations is done. If no successor is confirmed by May 15, current Fed Chair Jerome Powell will stay on past his term.