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ARTICLE AD BOX
Summary
Grilled by US Senators, President Trump’s Fed chair nominee Kevin Warsh rejected charges of being a ‘sock puppet.’ So, which way will he take the Fed if his appointment is confirmed? The dollar’s fate might be pegged on it.
US President Donald Trump’s nominee for Federal Reserve chair Kevin Warsh is facing the heat before he even gets to that hot seat.
On Tuesday, Senate Banking Committee members lobbed a fiery attack on him during his scheduled confirmation hearing over myriad issues, but most critically over whether he would work independently of the White House.
Democratic Senator Elizabeth Warren called Warsh a “sock puppet” for Trump; on Tuesday, Trump said he’d be “disappointed” if Warsh didn’t cut policy rates.
Suspicions have swirled around whether the latter would go by Trump’s say-so, although he strongly denied any such allegiance.
Since his confirmation seems likely in a Republican dominated Senate, which way he leads the Fed would have implications for the world.
If he embarks on quantitative tightening by offloading a big stack of bonds, a policy in whose favour he argued recently, the world would be watching for spillover effects.
But should he reveal a will to please the White House that contradicts what the Fed must do as an institution, the US dollar could get fatally compromised and analogies would be drawn with Rome’s once-mighty denarius.
English (US) ·