Trump Has an Open Line to the Fed Chair. Nixon Tried That Too.
President Trump has called Federal Reserve Chair Kevin Warsh repeatedly since May, The Wall Street Journal reported. Trump reaches out in bursts, then goes quiet for stretches, people familiar with the calls said.
The calls have touched on how the Iran war and artificial intelligence (AI) are affecting the economy, the sources said. One person said rates have not come up since Warsh's Senate confirmation. That keeps intact the wall between the White House and monetary policy.
A Bond Market Already on Edge
The contact lands as bond investors already question Warsh's independence. Last week, the Federal Open Market Committee (FOMC) voted 9-3 to hold rates steady. Warsh then gave evasive answers at his press conference.
The 30-year Treasury yield jumped afterward to its highest level since before the 2007-08 financial crisis. Three FOMC members had pushed for an immediate hike. Warsh sidestepped questions about why he disagreed with them.
The three later explained their dissenting rate hike votes in separate remarks. That added to the sense that Warsh keeps his cards close to the vest. He also testified before Congress in July, weeks before the FOMC split became public.
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