Warsh embarks on high-wire act of convincing investors without angering Trump

Subscribe to enjoy similar stories.Wall Street and Washington will be watching Kevin Warsh on Tuesday for any sign he has an understanding with President Trump to cut interest rates if installed as chair of the Federal Reserve. Trump will be watching for any sign he doesn’t.The high-wire act starts before Warsh even has the job.

Warsh secured the nomination by convincing Trump he shares the president’s view that the Fed should be cutting rates. At his Senate confirmation hearing Tuesday, he can reaffirm that case—at a moment when the Iran war has turned economic conditions against it—or begin, carefully, to distance himself from it.Air cover from Treasury Secretary Scott Bessent, who last week said he understood why the war had made the Fed hesitant to cut, might have helped Warsh.

But Trump publicly overruled Bessent one day later, saying he didn’t agree.Warsh has said almost nothing in public about monetary policy in five months—since before he was selected for the job. He broke the silence Monday, saying in prepared remarks for his confirmation hearing that the Fed’s independence isn’t threatened when elected officials “state their views on interest rates.”But he also warned that continued inflation would raise public doubts about whether monetary-policy independence is worth preserving.“The world has changed since the president and Kevin—and any other Fed candidate—may have talked,” said Glenn Hubbard, the Republican economist who served with Warsh under former President George W.

Bush. Bringing colleagues along is Warsh’s job, he said, “and it’s hard to believe that consensus would be around an immediate rate cut, just given the state of the world.”Jerome Powell, the outgoing chair, approached Trump’s pressure for