Federal Reserve chair nominee Kevin Warsh travels to Capitol Hill on Tuesday to convince lawmakers he can carry out a presidential push for lower interest rates while remaining free of political constraints in setting policy.
In a much-anticipated hearing before the Senate Banking Committee, the former Fed governor will face questioning over a variety of subjects, from monetary policy to banking regulation to his own complicated personal finances
None likely will be more important than establishing the boundaries between the Fed’s decision-making and politics.
“He has a tricky communication question,” said Bill English, a professor at the Yale School of Management and the Fed’s director of monetary affairs from 2010-15, a period that overlapped with Warsh’s time there.
“I suspect that the way he’ll handle that is by being clear that his views are that rates can likely go lower, maybe a fair amount lower,” English said. “But at the same time, when asked directly about independence, be clear that he values independence. He thinks that independence is important and that a less independent Fed in the medium and long term would be a bad thing for the country.”
