Federal Reserve

Warsh: 'I will not be Trump's puppet'. The tycoon: disappointed if he doesn't cut rates

"The Fed is sticking to its forecasts longer than it should," has the man nominated by Donald Trump to lead the Federal Reserve, during a hearing before the Senate Banking Committee

21 April 2026

Kevin Warsh, candidato designato dal presidente degli Stati Uniti Donald Trump alla carica di prossimo presidente della Federal Reserve, testimonia durante un'audizione di conferma davanti alla Commissione bancaria del Senato a Capitol Hill, Washington, D.C., Stati Uniti, il 21 aprile 2026. REUTERS/Elizabeth Frantz REUTERS

4' min read

Translated by AI

Versione italiana

4' min read

Translated by AI

Versione italiana

"The independence of the Federal Reserve depends on the Fed itself". The US Central Bank's president-designate, Kevin Warsh, in his confirmation hearing before the US Senate Banking Committee, said he was "absolutely convinced of the Fed's independence". Warsh, at the outset, said he was "deeply grateful to President Trump for his confidence," reiterating the two pillars of monetary policy of full employment and price stability.

"Absolutely not, I will not be the puppet" of President Donald Trump, Warsh later said in response to a question from the Senate Banking Committee. Warsh added that "the president has never asked me to predetermine, commit, fix, decide on any interest rate decisions in any of our discussions, nor would I ever agree to do so." During the hearing, part of the process for confirmation of his nomination (which must take place in the Senate), Warsh added: "The President has never once asked me to commit to a specific interest rate decision, full stop, nor would I have agreed to do so if he had."

A "fatal mistake" to have let inflation rise

In his prepared statement for the Senate Banking Committee, Warsh said that the US central bank must be largely independent of political influences while remaining focused on its primary objectives. "The Fed must remain within its areas of responsibility. The Fed's independence is most at risk when it gets into fiscal and social policies in which it has neither authority nor expertise."

For the central bank leadership candidate, however, over the past few years, especially since Covid, 'the Fed has missed the mark and we are still dealing with the monetary policy mistakes made in 2021 and 2022: when you let inflation go up, it is harder to bring it down'. That was a 'fatal mistake' that is still being dealt with. For Donald Trump's appointee, 'fundamental reform is needed to make things right', through a 'regime change, a new inflation framework, a different use of Fed tools (rates and balance sheet) and new communication'.

The Federal Reserve has two tools, "monetary policy and credibility," Warsh emphasised again, remarking to the Senate Banking Committee that he believes "a reform-oriented Federal Reserve can make a real difference for the American people. That is why, in spite of pressure from President Donald Trump, 'I am committed to ensuring that the conduct of monetary policy remains strictly independent'. Warsh emphasised the importance of the independence of monetary policy and that policymakers 'must act in the best interests of the nation', rejecting arguments that political pressures influence monetary policymakers.

Senator Warren's pressing on financial statements

In another passage of the hearing, Warsh came into the crosshairs of Democratic Senator Elizabeth Warren, who harshly criticised the opacity of his financial statements, including investments in hi-tech, Chinese and other companies, challenging him to demonstrate his independence from President Trump's pressures with a political issue on which he openly disagrees with the tycoon. Warsh, who in the event of confirmation by the Banking Commission will be the Fed's richest chairman with assets estimated at around $200 million, said he had defined the assets to be sold in his first 90 days in office, without providing details. The asset declarations, consisting of no less than 69 pages, reveal a myriad of investment funds, bank accounts and stakes in what appear to be dozens of start-ups. One of the most relevant disclosures concerns two stakes in an investment vehicle called 'Juggernaut Fund', each worth more than $50 million. The size of these holdings underlines the Fed presidential candidate's very close ties to Wall Street and Silicon Valley.

The Inflation Challenge

If confirmed, Warsh would take over as head of the Federal Reserve at a crucial time for the economy, with inflation still proving stubborn and at risk of flaring up again should the conflict with Iran continue. Warsh will also face close scrutiny of his multi-million dollar wealth and business connections.

Also weighing on Warsh's confirmation is the stance of Republican Senator Thom Tillis, who has vowed to block it until the criminal investigation into outgoing Fed Chairman Jerome Powell for alleged embezzlement in the refurbishment of the central bank's Washington headquarters is concluded. In many quarters, the investigation is seen as a political act against Powell for his clash with Trump over lowering interest rates.

Instead, the US president returned to criticise the renovations to the Fed's headquarters, the one at the centre of the criminal case launched by the Justice Department against the central bank's (outgoing) leader Jerome Powell. "I would have fixed that beautiful building for $25 million and they are spending $4 billion and maybe more," Trump said. "I'm afraid Kevin Warsh is going to have to have an office next to me because the Fed building won't be finished," he then concluded in reference to the man he chose to lead the US central bank in place of Powell, whose term as leader will end on 15 May.