Trump Tells New Fed Chair Warsh to Be “Totally Independent” at Swearing-In

 US President Donald Trump used the swearing-in ceremony for incoming Federal Reserve Chair Kevin Warsh to publicly state that he wanted Warsh to be “totally independent” in his new role — a statement that carries significant weight given Trump’s long and turbulent history of pressuring the Federal Reserve over interest rate decisions.

The declaration of independence is notable precisely because of who is saying it and to whom. Trump spent much of his first term openly criticizing then-Fed Chair Jerome Powell, repeatedly demanding lower interest rates and publicly attacking the central bank’s decisions in ways that alarmed economists and market watchers concerned about the independence of monetary policy from political interference.

The Federal Reserve’s independence from political pressure is considered a cornerstone of sound economic management. When a president can influence interest rate decisions for political rather than economic reasons the consequences for inflation, employment, and long term financial stability can be severe.

Warsh is a former Fed governor and Wall Street veteran who was considered a frontrunner for the Fed chair position for years. His appointment signals that Trump wanted someone with serious financial credentials in the role.

Whether Trump’s public pledge of independence reflects a genuine shift in his relationship with the central bank or represents optimistic language that will be tested the moment interest rate decisions become politically inconvenient remains to be seen.

Words at a swearing-in ceremony are easy. The real test comes when the Fed does something the president doesn’t like.

— KeStar Worldwide | Fast. Clear. Unfiltered.

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