Banking’s Rounds liked Warsh’s ‘tone’ in first testimony as Fed chair
Sen. Mike Rounds, R-S.D., a member of the Senate banking committee, said on CNBC’s “Squawk Box” on Thursday that Federal Reserve Chairman Kevin Warsh struck the right tone in an appearance before the panel this week.
“I think his message was a good message. He started off by talking about the need to get inflation under control, the focus that the Fed had on that,” Rounds said. “So I think we’re on the same playing field as what Kevin Warsh wants to be.”
Warsh, who took over as Fed chair in May, was on Capitol Hill for two days of testimony this week, first in the House on Tuesday and then before the Senate panel on Wednesday, where he fielded questions on inflation and the independence of the central bank.
President Donald Trump appointed Warsh after an extended campaign against his predecessor, Jerome Powell, to lower interest rates. The Fed, in Warsh’s first meeting as chair in June, held rates steady.
“We’d love to have inflation to come down and have interest rates on 30-year mortgages come down,” Rounds said. “That’s critical. But that’s a long-term thing that’s got to be done, and I think the Fed is correct … maintaining rates where they did the first time around.”
U.S. Senator Mike Rounds (R-SD) asks the witness a question during the Senate Banking, Housing, and Urban Affairs Hearing to examine the President’s Working Group on Financial Markets report on Stablecoins in Washington, D.C, February 15, 2022.
Bill O’Leary | Pool | Reuters
Rounds commended Warsh for his focus on inflation, which he said is in line with work Congress has done to bring consumer costs down and ease the effects of rising costs, including most recently by passing a sprawling housing package that aims to lower costs for homebuyers and renters and rein in the role of institutional investors in owning rental homes.
During testimony this week, Warsh sought to emphasize his independence from the White House, which was called into question after months of Trump haranguing Powell over interest rates. Trump had threatened to fire Powell, and his administration launched a criminal investigation into the then-Fed chair.
“I want the Federal Reserve to be independent. I want them to make the decisions based on what they believe is right,” Rounds said.