Senators grill Kevin Warsh in Fed chair hearing
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Good morning from the Financial Times. Today is Wednesday, April 22nd, and this is your FT News Briefing. The U.S.-Iran ceasefire lives to see another day, and American senators grilled the man who could be the next Federal Reserve Chair. Plus, what are some lessons that we can learn from the history of finance? A new podcast from the FT explores the ideas that shape today's institutions. I'm Mark Filippino, and here's the news you need to start your day.
U.S. President Donald Trump extended the ceasefire with Iran. It otherwise would have expired tonight.
What recent developments occurred in the U.S.-Iran ceasefire?
He said on social media yesterday that the truce will remain in place until negotiations between the two countries conclude. Now, this is a bit of a change of pace. Trump said repeatedly that he did not want to extend the ceasefire. But prospects of a second round of negotiations look bleak. Iranian officials said yesterday they won't attend talks in Pakistan, and they think further talks would be, quote, a waste of time. That's according to Iran's semi-official Tasnim news agency. Iran's foreign minister blames the stalled talks on, quote, unacceptable actions from the U.S. He called the American naval blockade of all Iranian ports a, quote, act of war and a ceasefire violation. Trump said the U.S.
will continue its blockade while the ceasefire is in place.
This is as consequential a moment for the U.S. economy and frankly for the institution as any point since the late 1970s.
That's Kevin Warsh, President Donald Trump's nominee to chair the Federal Reserve. He appeared for his confirmation hearing yesterday. And senators grilled the former Fed governor on topics ranging from his independence from Trump to his personal wealth. Here to discuss how that hearing went is the FT's U.S. economics editor, Claire Jones. Hi, Claire.
Hello, Mark.
So what were the top lines from this confirmation hearing?
Well, as one would expect, given the current environment and all of Donald Trump's calls for the Fed to cut rates and threats to fire current Fed Chair Jay Powell and his colleagues, the hearing was very much focused on whether or not Kevin Walsh can ensure the US Federal Reserve, the most important central bank in the world, can remain independent from the White House. Walsh was pretty adamant that it could and also claimed that the president had never asked him to cut interest rates.
So the president has never sat you down, looked you in the eye and said, here's the deal, Scooter, I'm going to appoint you president. But you got to agree to lower interest rates. That didn't happen or did happen? The president never once asked me to commit to any particular interest rate decision, period. And nor would I ever agree to do so if he had. But he never did.
Now, Claire, as I alluded to earlier, there were some questions about Warsh's personal wealth. Tell me what happened there.
So Walsh is a very rich man. We know from his financial disclosures that all Senate nominated officials have to submit that he has assets worth at least $130 million. The big questions were exactly what are some of those assets? A lot of what he holds is confidential. Elizabeth Warren, the most senior Democrat on the banking committee, didn't seem to like that very much. There were also questions from her and others as to when Walsh planned to divest of some of his assets and what he planned to do with the proceeds.
Right. And this is probably a good place to mention that Warsh has said he had, quote, come to a full agreement with the Office of Government Ethics on divesting the assets to meet government rules, and that he was likely to invest those proceeds in cash and treasury bonds. So, Claire, a little earlier, we heard that Warsh thinks this is a consequential moment for the U.S. economy. Hard to argue with that. What is Warsh's approach to the moment that we're in? Did he say?
On the detail, we didn't get that much information yesterday on what he tends to do about the rise in inflation we've seen due to the rise in energy prices that's resulted from the Iran war.
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