3 weeks ago
Trump Downplays Warsh Talks Amid Fed Independence Doubts
The Federal Reserve is the group that helps decide how much things cost in America by setting interest rates.
Kevin Warsh is the chairman, or leader, of that group.
The president of the United States, Donald Trump, sometimes talks to him.
Trump says he has only talked to Warsh once, and it was a very short conversation.
But one of Trump's own helpers, Kevin Hassett, says the two men talk about the economy all the time.
This matters because the Federal Reserve is supposed to make its own decisions without pressure from the president.
Trump says he supports Warsh completely and that the whole board decides together, not just one person.
Trump also says he would like interest rates to be lower, so borrowing money would be cheaper.
The White House is also pushing to remove another Fed leader, Lisa Cook, over claims that have not been proven.
Trump said he has spoken to Federal Reserve Chairman Kevin Warsh only once, briefly, contradicting his own advisers' accounts.
National Economic Council Director Kevin Hassett said the pair discuss the economy "all the time."
Bloomberg previously reported Trump and Warsh have spoken multiple times since Warsh was confirmed in May; the Wall Street Journal also reported frequent contact.
Trump reiterated his desire for lower interest rates while saying he backs Warsh "100%" and attributing Fed policy decisions to the central bank's board.
The White House has been pressuring to remove Fed Governor Lisa Cook over unverified mortgage fraud allegations, adding to concerns about Fed independence.
- Who
- President Donald Trump, Federal Reserve Chairman Kevin Warsh, National Economic Council Director Kevin Hassett, and Fed Governor Lisa Cook
- What
- Trump downplayed his conversations with Warsh, contradicting advisers' accounts and raising fresh questions about whether he is seeking to directly influence the central bank and its interest-rate policy
- Where
- The articles do not specify a location
- When
- Trump made his remarks on Monday; Warsh was confirmed in May; the White House has targeted Lisa Cook over the past week
- Why
- Because of concerns about Federal Reserve independence and Trump's long-running desire to see interest rates lowered
Concerned Observers
Trump Administration
Frequency of contact with Fed chair
Concerned Observers
Trump's own top economic adviser and people familiar with the talks say they have occurred more often, raising questions about presidential influence over the central bank.
Trump Administration
Trump insists he has spoken to Warsh only once, briefly, and says press accounts wrongly made it sound like they talk "every time."
Fed independence and interest rates
Concerned Observers
The episode renewed doubts about whether the president is seeking to directly influence monetary policy, especially given his push for lower rates and White House pressure on Governor Lisa Cook.
Trump Administration
Trump says Warsh will run the Fed with his board and that decisions are not his alone, while noting he knows what Warsh "would like to do" and that rates should be lower.
Key facts
- Trump's claimed contact with Warsh
- One brief conversation "a few days ago"
- Hassett's account
- Pair discuss the economy "all the time"
- Warsh confirmation
- Confirmed as Fed chairman in May
- Reported conversations
- Multiple since May (Bloomberg); frequent (Wall Street Journal)
- Trump's support for Warsh
- "100%"
- Trump's policy stance
- Wants the Fed to lower interest rates
- US inflation
- 3.5% in June, cooling from 4.2%, still above the 2% target
- Fed Governor Lisa Cook
- White House pressuring for her removal over unverified mortgage fraud allegations
Quotes
Donald J. Trump
United States President
“Look, he’s going to do it. He’s going to run it. I know what he’d like to do, but he has to run it. He’s got a board. It’s not only him. It was up to him. It would be different. But he’s got a board.”
livemint.com
“I spoke to him one time, briefly, a few days ago, just a conversation. They made it sound like I live and breathe, you know, I speak to Kevin all the time, every time.”
wionews.com
livemint.com
Sources
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