Warsh To Face Tough Questions From Dems on His Finances at Confirmation Hearing

President Trump’s pick to head the Federal Reserve, Kevin Warsh, is expected to face questions from Democrats at a hearing Tuesday where the focus will be on his vast wealth.The Senate Banking, Housing, and Urban Affairs Committee, which is charged with advancing or rejecting nominees for positions at the Federal Reserve, scheduled the confirmation hearing after Mr. Warsh turned in his required financial disclosures. Those documents estimated his fortune at more than $130 million but left a lot of questions about what makes up those investments.The top Democrat on the panel, Senator Elizabeth Warren, plans to question Mr. Warsh on his financial holdings. His financial disclosures gave figures in ranges rather than precise values. Mr. Warsh said he could not identify some holdings due to confidentiality agreements.“That’s not just a red flag. That’s a red flag surrounded by fireworks and sparklers,” Ms. Warren told reporters on Friday. “This is a real problem.”Democrats are also expected to press Mr. Warsh — a member of the Fed’s governing board from 2006 to 2011 — on his role negotiating bailouts during the 2008-2009 financial crisis, according to a staff memo that the Wall Street Journal reviewed.Mr. Warsh’s path to confirmation remains in question. Senator Thom Tillis, a North Carolina Republican who is not running for reelection, has repeatedly said he thinks Mr. Warsh is a good pick but he will not support advancing the nomination until after the Justice Department finishes a probe into the current Fed chairman, Jerome Powell. Mr. Tillis has voiced concern about maintaining the independence of the Fed.With the committee divided between 13 Republicans and 11 Democrats, any one GOP member can effectively kill a nominee if he or she votes with all members of the minority party.Mr. Powell announced in a January video that he had been served grand jury subpoenas as part of a criminal investigation into over-budget renovations at the Fed’s Washington headquarters. The probe is also looking into whether Mr. Powell lied about the project during congressional testimony.Mr. Trump has repeatedly criticized Mr. Powell for not lowering interest rates as quickly as he would like, and critics charge that the president prompted the criminal probe as political retribution. A federal judge has squashed the subpoenas but the Justice Department could appeal that decision.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. “Well, then I’ll have to fire him, okay?” Mr. Trump said in an interview that aired on Fox Business. “If he’s not leaving on time. I’ve held back firing him. I’ve wanted to fire him but I hate to be controversial.”Mr. Warsh will tell the committee on Tuesday that monetary policy independence is essential for the Fed but that he doesn’t think the central bank is threatened when the president or other elected officials express their views on interest rates.“Central bankers must be strong enough to listen to a diversity of views from all corners, humble enough to be open-minded to new ideas and new economic developments, wise enough to translate imperfect data into meaningful insight, and dedicated enough to make judgments faithfully and wisely,” Mr. Warsh will say in prepared remarks that were released ahead of the hearing.“Simply stated, Fed independence is largely up to the Fed,” Mr. Warsh added.Mr. Warsh will also tell the senators on Tuesday that the Fed must “stay in its lane” and avoid straying into fiscal and social policies where it has “neither authority nor expertise.”The Senate Banking Committee’s chairman, Senator Tim Scott, has not set a date for a vote on Mr. Warsh’s nomination. “We’ll talk through the economy, we’ll talk through price stability and inflation, and we’ll talk about the independence of the Fed,” Mr. Scott said in a Fox Business interview last week. “And then the second step, later on we’ll have a vote on Kevin Warsh.”

Warsh To Face Tough Questions From Dems on His Finances at Confirmation Hearing

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