La Jornada: US Senate confirms Warsh as head of the Fed

Washington. The US Senate yesterday confirmed Kevin Warsh, nominated by President Donald Trump, as head of the Federal Reserve (Fed) for a four-year term.

Warsh inherits a central bank whose independence is under attack by the Executive and inflation that is at the highest level in the last three years.

The Senate voted 54-45 to confirm Warsh, who, like Trump, has advocated for lower interest rates.

Originally from New York State, he holds degrees from Stanford University and Harvard Law School. The 56-year-old jurist prematurely left his first term on the board in 2011, after expressing differences on monetary policy.

Now he returns to direct the Federal Reserve for four years, in charge, among other tasks, of combating inflation in the United States and guaranteeing maximum employment, at a time of unprecedented political pressure on the independence of the Fed.

Trump frequently criticized and insulted Warsh’s predecessor, Jerome Powell, for not cutting rates. His administration also put Powell in the crosshairs of a criminal investigation and is still trying to remove another Fed governor, Lisa Cook.

In his confirmation hearing before the Senate Banking Committee, Warsh promised to preserve the independence of the Fed and assured that he would not be “at all” the president’s puppet.

In his first stint at the Fed, Warsh was considered a hawkthat is, he was inclined to give priority to controlling inflation, generally by raising interest rates.

In recent years it has changed its stance to align with Trump’s demands for lower rates, even though the US economy faces high inflation since the Covid-19 pandemic. Warsh attributes the price increase to “policy errors” by the Fed in 2021 and 2022, which is why he has proposed modifying the data on which the agency bases its decisions.