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Fed nominee Warsh commits to central bank's independence, with limits
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Fed nominee Warsh commits to central bank's independence, with limits
Apr 20, 2026 10:31 AM

WASHINGTON, April 20 (Reuters) - Kevin Warsh, U.S. President Donald Trump's nominee to lead the Federal Reserve, will tell lawmakers at his confirmation hearing on Tuesday that he is "committed to ensuring that the conduct of monetary policy remains strictly independent," according to prepared remarks released on Monday.

"I am equally committed to working with the Administration and Congress on non-monetary matters that are part of the Fed's remit," the 56-year-old financier and former Fed governor will tell members of the Senate Banking Committee.

Fed independence is "at its peak in the operational conduct of monetary policy," Warsh said in his prepared remarks. "That degree of independence does not extend to the full range of its congressionally mandated functions," he said, adding that U.S. central bank policymakers are not entitled to the same "special deference" in their stewardship of public monies, bank regulation and supervision, "or in areas affecting international finance, among other matters."

Warsh, who has been nominated to replace Fed Chair Jerome Powell as head of the central bank, also pledged to push through change at the monetary policy agency, saying the tendency of large and complex institutions to stick with the status quo is "harmful" when the world is changing fast.

"In a time that will rank among the most consequential in our nation's history, I believe a reform-orientedFederal Reserve can make a real difference to the American people," he said in the prepared remarks.

Warsh, who was a Fed governor from 2006 to 2011, used much of his speech to reprise critiques he has made of the central bank in the decade and a half since resigning. The Fed, he said, must "stay in its lane" rather than stray into fiscal and social policies, phrasing that in the past he has used to take the central bank to task for doing research into the economic implications of climate change and targeting "inclusive" full employment. The Fed in the last few years has largely abandoned any focus on climate change.

Warsh also said he views Fed independence as being under siege because the central bank has failed to ensure its congressionally assigned mandate of price stability.

"Low inflation is the Fed's plot armor, its vital protection again(st) slings and arrows," Warsh said. "So, when inflation surges - as it has done in recent years - grievous harm is done to our citizens ... (who) may also lose faith in our system of economic governance, raising doubts whether monetary policy independence is all it's cracked up to be."

Warsh's confirmation hearing before the Senate panel is scheduled to begin at 10 a.m. EDT (1400 GMT) on Tuesday.

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