Trump's own pick for Fed chair might raise rates against Trump's wishes at his first big decision. Independence test, or political theater?
Kevin Warsh, nominated by Trump and confirmed as Fed chair, has publicly promised the Fed will stay independent — but with inflation running hot, his first real interest-rate call puts that promise to the test.
What happened
Kevin Warsh, nominated by Trump and confirmed as Fed chair in a near party-line vote, has publicly insisted the Fed will stay independent — telling a July central-bank conference ‘we're going to be an independent central bank at this moment’ and that inflation would not be tolerated for political reasons. His first real test comes at the Fed's September meeting, with inflation running hot enough that Wall Street expects a possible rate hike rather than the cuts Trump wants.
Why people disagree
Skeptics point out Warsh was picked partly because Trump expected him to be more dovish, and note his own past shifts in position, arguing a Trump appointee is unlikely to truly break from the person who chose him. Others think he'll side with the Fed's own economists and market credibility over political loyalty — warning that markets would punish a Fed seen as caving to the White House.
What's still unclear
Whether Warsh actually holds the line if a hike becomes clearly warranted by the data, or finds a way to avoid a decision that visibly contradicts Trump.
Sources
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