President Donald Trump, after years of hostility toward the Federal Reserve, has begun treating Chairman Kevin Warsh almost as a member of his Cabinet, according to a Wall Street Journal report cited by CNBC. The shift raises concerns about the erosion of Fed independence, which exists in part to keep politicians from pressuring central bankers to run the economy too hot.
Trump has "spoken repeatedly" with Warsh since Warsh's confirmation as Fed chairman, the Journal reported. This marks a sharp departure from Trump's relationship with Warsh's predecessor, Jerome Powell, whom Trump appointed and later soured on. Fed calendars show only one direct meeting between Trump and Powell during the president's second term through Warsh's swearing-in on May 22, aside from a tense joint tour of a Fed construction site.
The White House has not denied the contact. Spokesman Kush Desai said Trump "has repeatedly stressed that he is giving Chairman Warsh the space he needs to restore confidence and competence in Fed decision-making," adding that Trump respects Warsh's independence.
Trump previously took legal steps to undermine the Fed's independence under Powell, but has taken a different approach with Warsh. He has continued to call for interest-rate cuts but says he trusts Warsh, even though Warsh has not changed the rates he inherited from Powell.
