U.S. Federal Reserve Chairman Kevin Warsh testifies during a Senate Banking Committee hearing titled “Semiannual Monetary Policy Report to Congress” on July 15, 2026, at the U.S. Capitol in Washington, DC.
Ken Cedeno | AFP | Getty Images
Federal Reserve Chairman Kevin Warsh on Wednesday declined to say whether he has spoken to President Donald Trump since becoming chairman, but acknowledged that he has been in regular contact with the Trump administration.
That doesn’t affect his independence, Warsh said.
Seven weeks into his term as Fed chairman, Warsh is in a delicate position. Investors are trying to figure out what kind of interest rate policy the Fed will adopt as Mr. Warsh backtracks on his comments about the Fed’s plans. He was appointed by the president, who said lower interest rates were a litmus test for selecting a chair, and has been pushing for lower rates since Warsh was confirmed. Any suggestion that Mr. Warsh is not honestly basing his views could threaten his ability to reach an agreement on interest rates on the divided Federal Open Market Committee.
The White House declined to comment on any conversations between the president and the Fed chair, saying it did not address the president’s private conversations that may or may not have taken place.
Treasury Secretary Scott Bessent and a Fed spokesman declined to comment.
Warsh repeatedly defended his independence and the credibility that comes with it during his two-day appearance in Congress, from the House on Tuesday to the Senate on Wednesday.
“The independence of the Federal Reserve is sacrosanct,” Warsh said Tuesday. “Part of the reason for the Fed’s power doesn’t just come from the printing press, but sometimes it’s helpful. It comes from our credibility, our credibility to make the best possible choices in line with the laws you’ve written for us.”
As Mr. Warsh pointed out in his testimony both days, inflation has been above the Fed’s 2% target for the past 63 months. Consumer Price Index and Producer Price Index data released this week showed inflation fell in June, but Warsh cautioned against taking a victory lap.
“Any central bank would be happy to see the data trending in the right direction. In my view, these are all imperfect indicators of the state of underlying inflation,” he said.
This view of inflation is controversial within the Fed. Mr. Warsh created a special committee to examine how the Fed thinks about inflation. But it’s unclear whether the Fed will accept the task force’s and Mr. Warsh’s views on the issue.
Opinions appear to be divided on the direction of interest rates at the FOMC. Governor Christopher Waller and New York Fed President John Williams have said in recent days that interest rates may need to be raised this year.
But if Mr. Warsh still needs an ally at the Fed, he may have one in the Trump administration. The White House said Trump still wants to lower interest rates overall, but that the president respects Warsh’s views on how the Fed should be run.
The Fed chair and Treasury secretary meet for breakfast every week, following a long-standing tradition.
Warsh said Wednesday that he and Bessent have continued that tradition and even exceeded it.
“I meet with the Treasurer every week, and we talk a lot in between,” he said, adding that he would decide on interest rates himself.
Mr. Warsh and Mr. Bessent were mentored by investor Stanley Druckenmiller, who Mr. Warsh employed for more than a decade before becoming Fed chairman. Mr. Bessent worked at Druckenmiller early in his career as a hedge fund manager. Warsh and Bessent didn’t work at Druckenmiller at the same time, but they knew each other well before taking on their current jobs.
Before becoming Fed chairman, Warsh said he wanted to negotiate a new Treasury and Fed agreement, referring to the 1951 agreement that established the Fed’s modern independence. Warsh said he would like to transfer some authority over the Fed’s balance sheet to the Treasury secretary. He has not elaborated on these views since becoming Fed chairman, and has established a working group to review the Fed’s balance sheet policy.
Trump’s top economic adviser, Kevin Hassett, also told CNBC’s “Squawk Box” Wednesday that he also spoke with Warsh recently. Hassett said he praised Warsh’s new task force when the two met.
In response to a direct question from the Senate Banking Committee, Warsh declined to say whether he had spoken to the president since becoming chairman. However, he did not think it should be viewed as a problem even if he discussed it with the president.
“It’s certainly not unpleasant to get a call from the chairman of this committee or the president of the United States,” Warsh said.
Mr. Powell met with Mr. Bessent only a few times outside of regular breakfast meetings, according to a public calendar published by the Fed. The only other such meeting in 2026 was when Powell and Bessent discussed the risks of artificial intelligence with bank CEOs in April.
