1. United States
2. Calif.
3. Letter

I write to express my deep concern about the potential nomination of Kevin Warsh as the next Federal Reserve Chair. Although Mr. Warsh boasts impressive credentials, including crisis experience and expertise in both Wall Street and government, his current alignment with President Trump on interest rate decisions jeopardizes the Federal Reserve's independence and credibility. During the 2008 financial crisis, Mr. Warsh served as an advisor to Fed Chairman Ben Bernanke, warning of undercapitalized financial systems. However, his policy judgment during this period has been criticized for downplaying deflationary threats and opposing quantitative easing, despite evidence proving otherwise. This pattern indicates a tendency towards hawkish positions that could undermine necessary monetary policies in future economic downturns. More recently, Mr. Warsh has criticized the Fed for "mission creep," asserting that focusing on issues like climate change and diversity contributed to current inflation. Such views lack empirical support and suggest a bias against essential policy expansions, potentially hindering the Fed's response to economic challenges. The most pressing issue with Mr. Warsh's nomination is the threat it poses to Federal Reserve independence. President Trump has explicitly stated his expectation that the next chair will consult him on interest rate decisions, contradicting the post-Volcker norm of insulating the central bank from political pressure. Despite Mr. Warsh's emphasis on independence in his writings, his alignment with Trump raises significant doubts about his ability to maintain this crucial principle during a contentious tenure. The uncertainty surrounding Mr. Warsh's capacity to resist political pressure jeopardizes Fed credibility and its capacity to make unpopular yet necessary decisions for long-term economic stability. His competence and experience are not in question; however, the circumstances of his potential appointment create substantial doubt about whether he can effectively exercise independent judgment when required. I urge you to reject Mr. Warsh's nomination and prioritize candidates committed to preserving Federal Reserve independence and maintaining its credibility as a guardian against inflationary pressures and economic instability.