Chair nominee Kevin Warsh says Fed must ‘stay in its lane’ to maintain independence

Federal Reserve chair nominee Kevin Warsh said Monday the central bank must be largely independent of political influence but also should stay focused on its primary goals.

In remarks to be delivered Tuesday to the Senate Banking Committee, Warsh also expressed firm commitment to fighting inflation with only one mention of the labor market.

“Simply stated, Fed independence is largely up to the Fed,” the former Fed governor said.

Warsh's speech also features a familiar criticism he has brought in recent years, namely that the Fed on multiple occasions has overstepped its boundaries and reached into areas such as climate change and social inequality.

“The Fed must stay in its lane. Fed independence is placed at greatest risk when it strays into fiscal and social policies where it has neither authority nor expertise,” he added.

President Donald Trump announced in late January that Warsh would be his pick to replace current Chair Jerome Powell.

Since the replacement process began, questions have been raised about whether Warsh or any other Trump pick would be able to withstand the repeated pressure from Trump and other White House officials to lower interest rates.