▲ Kevin Warsh, Chair of the U.S. Federal Reserve, and U.S. President Donald Trump
U.S. President Donald Trump has spoken with Federal Reserve Chair Kevin Warsh multiple times since Warsh took office this May, the Wall Street Journal (WSJ) reported on the 5th (local time).
Citing anonymous sources, the WSJ noted that maintaining such a communication line between the president and the head of the central bank departs from recent precedents.
Sources said President Trump tends to call Chair Warsh in bursts.
He might make multiple calls within a span of a few days, followed by longer quiet periods, according to the sources.
President Trump has consulted Warsh on various issues, including the impact of the war in Iran and the rapid rise of artificial intelligence (AI) on the economy, the WSJ reported.
While it remains unclear whether the two discussed monetary policy, the WSJ cited a person familiar with their conversations as saying that President Trump has not brought up interest rates since Warsh was confirmed by the Senate.
In the United States, the president has the authority to nominate and appoint the Fed chair with Senate confirmation, but the central bank sets interest rates independently.
While occasional meetings between the president and the Fed chair are not unprecedented, such contacts over recent decades have been conducted in a formal and pre-arranged manner.
This is to avoid any perception that the president is influencing interest rate decisions.
According to the WSJ, recent presidents from Bill Clinton (serving 1993–2001) to Barack Obama (serving 2009–2017) largely avoided exerting public pressure on the Fed.
Contacts between the White House and Fed chairs were more frequent in the 1960s, but they diminished after it was starkly revealed that President Richard Nixon (serving 1969–1974) relentlessly pressured Chair Arthur Burns (serving 1970–1978) to ease monetary policy ahead of the 1972 election, which Nixon won.
Nixon won re-election, but high inflation followed.
In a December 1971 telephone conversation with President Nixon in the Oval Office, Chair Burns said he was pressing Fed governors to lower interest rates at a meeting the following week, to which Nixon replied, "You're doing fine," adding, "Just kick them in the ass a little bit [referring to the Fed governors]."
These conversations were recorded and later made public, causing considerable shock.
By the 1980s, communication between the president and the Fed chair generally took place through the Treasury secretary.
President Trump has expressed stronger dissatisfaction with the Fed's independence than any other recent president.
In an interview with the WSJ in December of last year, he even remarked that he wanted the Fed chair to consult with him when setting interest rate levels.
However, at Warsh's swearing-in ceremony six months later, President Trump took the opposite stance, stating, "I want Kevin to be totally independent," and adding, "Don't look at me, don't look at anybody. Just make up your own mind and do a fantastic job."
In his conversations with President Trump, Chair Warsh has frequently expressed a positive view of the economy, which aligns with his public remarks.
At a press conference last week, he stated, "The most notable feature of the economy is the strong growth in business investment."
During his confirmation hearings in April, Warsh said that the Fed's independence "is up to the Fed" and that elected officials expressing their views on interest rates does not constitute a threat to that independence.
President Trump has told supporters that Chair Warsh serves as a valuable external economic adviser.
Last week, before the Fed decided to hold interest rates steady, Trump praised Warsh, saying he knew Warsh wanted to do "the right thing," while adding, "He [Warsh] has a board, and the board is very political."
This contrasts with the attitude President Trump adopted toward Jerome Powell, whom he appointed as Fed chair in 2018 during his first term.
Powell stepped down as chair this May upon the expiration of his second term, though he remains a member of the Fed's Board of Governors.
During Trump's first term, Powell exercised caution, publicizing when he met or spoke with President Trump.
During Joe Biden's presidency, Powell met with Biden on only a handful of occasions.
President Trump repeatedly mocked Powell as "too slow," complaining that he refused to cut interest rates or did not lower them enough when he did.
He threatened to fire Powell multiple times and once compared talking to him to "talking to a wall."
Chair Warsh has also been spotted meeting frequently with other political figures.
On the 4th (local time), he had dinner at a popular restaurant in the Georgetown neighborhood of Washington, D.C., with Army Secretary Dan Driscoll, known as a figure close to Vice President JD Vance.
Additionally, according to the political outlet Politico, Warsh attended a dinner last month in Georgetown for Nick Luna, reportedly tapped as Vice President Vance's chief of staff, and Cliff Sims, Vance's national security adviser.
(Photo: AP, Yonhap News)
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