Warsh Says He Won’t Be Trump’s ‘Sock Puppet’ as Fed Chairman

Kevin Warsh said he will not be President Trump’s “sock puppet” as the chairman of the Federal Reserve and stressed the independence of the central bank during more than two hours of questioning at his confirmation hearing on Tuesday.The top Democrat on the Senate Banking, Housing, and Urban Affairs Committee, Senator Elizabeth Warren, used her opening statement to refer to Mr. Warsh as the president’s “chosen sock puppet” to voice his views on interest rates.Senator John Kennedy returned to that reference during his allotted time and asked Mr. Warsh if he was going to be the president’s “human sock puppet.”“Absolutely not,” Mr. Wash said. “I’m honored the president nominated me for the position and I’ll be an independent actor if confirmed as chairman of the Federal Reserve.”He later said that Mr. Trump had never told him to cut interest rates. The president has continually complained that the current chairman, Jerome Powell, has been too slow to cut interest rates.“The president never asked me to pre-determine, commit, fix or decide on any interest rate decision, in any of our discussions, nor would I agree to do so,” Mr. Warsh said.Two hours earlier, Mr. Trump had been asked in an interview on CNBC if he would be disappointed if Mr. Warsh didn’t cut rates “right away.” Mr. Trump said “I would.”The independence of the Federal Reserve was a key topic for senators on both sides of the aisle as they quizzed Mr. Warsh.“Independence has to be earned and it is earned by delivering on promises, the commitments that the Fed has made, and as the Fed hasn’t delivered on those promises, we shouldn’t be surprised that we hear politics that are entering the room at the Fed. We need to get the politics out,” Mr. Warsh said.Republicans on the panel heaped praise on Mr. Warsh, but one of them reiterated his determination to block the process while a criminal investigation into Mr. Powell continues.Senator Thom Tillis did not ask any questions but used his time to address that investigation. He said there is no indication that anything criminal was involved in cost overruns connected to a major renovation project at the central bank’s Washington headquarters.“If we put everyone in prison in federal government that had a budget go over, we’d have to reserve an area roughly the size of Texas for a penal colony because of the way government projects work,” Mr. Tillis said.With the committee divided between 13 Republicans and 11 Democrats, any GOP member can effectively kill a nominee by voting with all members of the minority party.“Let’s get rid of this investigation so I can support your confirmation,” Mr. Tillis said.Mr. Warsh declined to answer questions about the investigation into Mr. Powell and Mr. Trump’s attempt to fire another Federal Reserve governor, Lisa Cook. Mr. Warsh said it would be improper for him to comment on cases in the middle of the legal process.Mr. Powell’s term as chairman ends May 15 but he has indicated that he won’t leave the board of governors until the probe against him concludes.Mr. Trump said last week that the probe will continue and he’ll fire Mr. Powell if he doesn’t leave when his term as chairman ends. That could set off a new court battle.The committee’s chairman, Senator Tim Scott, has not set a date for a vote on Mr. Warsh’s nomination.

Warsh Says He Won’t Be Trump’s ‘Sock Puppet’ as Fed Chairman

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