The American president, donald trumpannounced this Friday that he will nominate Kevin Warsha former governor of the Federal Reserve (Fedcentral bank), to be the next president of that institution.
“I have known Kevin for a long time, and I have no doubt that he will become one of the great presidents of the Fedperhaps at best,” he wrote trump on its Truth Social platform.
“Never tea will leave lying“he added.
warsh has to replace to the current president of the Fed, Jerome Powellwhose term ends in May.
trump did his advertisement first thing in the morning, before the opening of Wall Streetwho was eagerly awaiting his decision.
Since his return to presidency a year ago, trump has been faced harshly with Powellwith the demand that the interest rates.
At its last meeting this week, the Fed opted for keep without changes interest rates reference in a range of 3.50% to 3.75%.
The challenges of the next president
warsha native of New York, has recently intensified his reviews to the Federal Reservesupporting many of the positions of trump and its administration.
Before he worked as banker of mergers and acquisitions in Morgan Stanley.
In the first term of trump was considered warsh for the presidency of the Fed -replacing Janet Yellen-, but finally the government elected Powell.
While trump keep asking interest rates lower prices to boost the economy, all eyes will be on how warsh defends the independence of the bank versus politics.
trump has tried remove to the governor of the Federal Reserve Lisa Cook for alleged mortgage irregularities, setting off a legal battle that will likely be crucial in determining how much discretion the president has in removing top officials from the central bank, an independent body of the government of the day.
The administration trump has also started a investigation about Powell for the reforms at the headquarters of the Federal Reservein an investigation that the current number one of the Fed has denounced as a threat to the independence from the bank.
In fact, these months of attacks personal of trump on central bank governors have fueled widespread fear among investors that the independence of criteria in matters of monetary policy of the Fed is under threat, which could pose a risk to the inflation in the largest economy in the world.
- The Fed has two mandates: keep at bay inflation and look for the full employmentand its action tool par excellence is the levels of the interest rates.
warsh has surpassed three others candidates who managed the market for the position: the governor of the Fed Christopher Waller; Rick Rieder, of the investment giant BlackRock, and the chief economic advisor of trumpKevin Hassett.
warsh was governor of the Fed between 2006 and 2011. He was also part of the administration of former President George W. Bush, where he served as White House economic policy advisor from 2002 to 2006, before being nominated to the Board of Governors of the Fed.
The Congress Obstacle
He appointment head of the central bank must be confirmed by the Senate.
He Republican Party of the president has most there, but the fate of the Fed It is one of the few issues on which some pro-government legislators publicly express their disagreement with donald trump.
Member of the commission Senate who will question the candidate, the Republican Thom Tillis made it known that he would not approve any appointment while the judicial proceedings against Powell not be discarded.
The democratic oppositionfor his part, accuses the president of wanting to place “puppets” in the Fed to take control.
Lower rates make credit cheaper, which encourages consumption and investment, thus increasing the economic dynamics.
