(The Washington Post, April 23, 2026)
Kevin Warsh, appointed by Donald Trump to lead the Federal Reserve, has promised independence to the central bank and showed seriousness during the Senate confirmation hearing, swearing that he has never promised rate cuts and does not want to prejudge rate decisions, reaffirming the commitment to keep politics out of the Fed and to reduce public communications to avoid market confusion.
The only real obstacle to his confirmation remains the unfounded criminal investigation initiated by Trump’s Department of Justice against current chairman Jerome Powell: once closed, Warsh will be able to quickly take office and demonstrate his intention to reform the institution with humility, moving away from distractions on green energy and diversity, equity and inclusion policies that have partly diverted the Fed in recent years.
Warsh described artificial intelligence as a disinflationary force, estimating that investments in data centers will give a modest boost to growth but that the overall impact of AI on the economy could be much greater, while emphasizing that the Fed will still have considerable work to do before it can assess productivity gains and their implications for rate policy, a cautious and optimistic approach that brings a healthy dose of humility to the institution.
Warsh Promises Independence to the Fed
“He testified under oath that he has never made any promises to Trump to vote for lower interest rates and said he is not someone who pre-decides where rates should be.”
The Commitment to Keep Politics Out
“He spoke convincingly about staying out of politics and ignoring pressure from elected officials. […] ‘We try to keep politics, if I am confirmed, out of the Federal Reserve.’”
The Need to Close the Investigation on Powell
“The biggest obstacle for Warsh to get the job is President Donald Trump’s refusal to drop the unfounded criminal investigation by the Department of Justice into outgoing Fed Chairman Jerome H. Powell. The sooner he does it, the sooner Warsh can proceed.”
The Cautious View on AI
“Last year Warsh described artificial intelligence as a ‘disinflationary force.’ On Tuesday he estimated that capital investments in data centers will increase growth by ‘a few tenths of a percentage point’ but predicted that AI’s impact on the broader economy could be ‘significantly larger.’”
The Hope for Humility at the Fed
“He said the Fed still has ‘considerable work’ to do before it can assess productivity gains and what they mean for rate setting. His scaled-back but optimistic perspective is welcome. The Fed could benefit from a healthy dose of humility.”
(Excerpt from the newsletter by Giuseppe Liturri)
