REED GRILLS FED NOMINEE KEVIN WARSH OVER WHETHER HE'LL CAVE TO TRUMP'S DEMANDS TO LOWER INTEREST RATES

The following information was released by Rhode Island Senator Jack Reed:

For over a century, the Federal Reserve has served as an independent central bank that can set interest rates without interference from Congress or the White House. But now, President Trump is sending clear signals that he wants his Fed nominees to advance his chaotic agenda from inside the Federal Reserve.

In September, Trump appointed one of his top economic advisors, Stephen Miran, to the Federal Reserve Board of Governors. At the first Federal Open Market Committee meeting Miran attended, he voted the way Trump had been pressing for.

Today, the Senate Banking Committee held a hearing for Kevin Warsh, President Trump's nominee to become the next Fed Chairman. A former Wall Street banker with considerable undisclosed assets, Mr. Warsh was previously appointed to the Fed's board of governors in 2006 by then-President George W. Bush after serving as Bush's economic policy advisor in the run-up to the 2008 financial crisis.

In August 2007, after stresses began appearing in the subprime housing market, then-Fed Governor Warsh said "we don't see any immediate systemic risk issues that are brought to bear" even as the subprime crisis ultimately blew up the economy and caused mass foreclosures a year later. It has been reported that while previously on the Fed Board, Warsh played "a key role during the 2008-2009 global financial crisis to help then-chair Ben Bernanke engineer bailouts of failing financial institutions and financial market backstops."

Leading up to today's hearing, President Trump has repeatedly demanded that interest rates be lower -- despite widespread concerns from experts that a cut could fuel further inflation beyond what Trump's tariffs and Iran war already have -- and castigated the current Fed Chair Jerome Powell, who is a champion for Fed independence, as a "moron."

When President Trump was asked during a recent interview if he thought rates would be lowered later this year despite inflationary pressures and President Trump's war of choice with Iran spiking gas prices and raising the cost of food, fertilizer, and other products President Trump replied: "When Kevin gets in, I do." Trump also reportedly joked that "he would sue Kevin Warsh, his nominee to chair the Federal Reserve, if he didn't lower interest rates."

Noting that transparency and preventing political influence inside the Fed are key to the agency's effectiveness and ability to promote a strong, resilient economy, maximum employment, and stable prices, U.S. Senator Jack Reed (D-RI) pressed Mr. Warsh about whether he would cave to President Trump's demands to lower interest rates if he were to take the reins at the Fed.

Senator Reed's exchange with Mr. Warsh on Fed independence follows:

Sen. Reed: Okay. The question of independence is one that I think will dominate these proceedings. This morning, President Trump was asked: would you be disappointed if your new Fed Chair doesn't cut rates right away? And President Trump answered, I would. It is very hard to separate President Trump's obsession with rate cuts, his attacks on the Federal Reserve, on Chairman Powell particularly, and your nomination. So, this independence thing seems to have evaporated quite quickly between President Trump statements and your positions. Again, you maintain you will be independent of President Trump?

Mr. Warsh: Yes, Senator, I do.

Sen. Reed: Well, President Trump constantly maintains that nobody is independent of him. That it's his morality that guides the whole United States government, including the Federal Reserve. And that you will be someone who will carry out his wishes. Frankly, do you suspect he chose you because you indicated to him that you're wont to cut rates?

Mr. Warsh: Senator, I don't know the reason for the president's choice. But I can tell you what I have been writing about for 15 years and what I said to the President...

Sen. Reed: Which is: 'I will cut rates if you give me the job.'

Mr. Warsh: No, that's not what I said, Senator. Now, the president, as you might know, much like virtually all presidents I've either known or studied, presidents tend to be for cutting rates. I think the difference is President Trump expresses it quite publicly without surrogates or subterfuge. But presidents want lower rates. But Fed independence is up to the Fed. Fed leadership has to make a decision about what is the right thing to do. In my judge...

Sen. Reed: No. You are the leader. You establish the moral and ethical standards and the economic principles of the Fed. And you just pass it off as, well it's not my job. It is everybody's job. That means it's nobody's job. Thank you.

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