US Treasury Secretary: Whether to sue over Fed rate policy is Trump's call, not that of Fed chair nominee Warsh

JH Kim

Summary

US Treasury Secretary Scott Bessent said that any legal action related to the Fed's interest-rate policy is a matter for President Donald Trump to decide, not Kevin Warsh.
He said markets are watching for possible shifts in the monetary-policy stance following President Trump's nomination of Kevin Warsh as the next Fed chair.
He said that amid debate over the next Fed chair, whether political pressure will affect the Fed's independence and the monetary-policy decision-making process is emerging as a key issue.

US Treasury Secretary Scott Bessent said any decision on legal action over the Federal Reserve's (Fed) interest-rate policy is a matter for US President Donald Trump—not for Kevin Warsh, the nominee for the next Fed chair.

According to the breaking-news account Walter Bloomberg on the 5th (local time), Bessent, asked whether a lawsuit could be filed against nominee Warsh over the Fed's rate policy, said, "That is entirely for the President to decide."

Warsh was recently formally nominated by President Trump to serve as the next Fed chair, and markets are watching for potential changes in the policy stance going forward. Trump has repeatedly criticized the Fed's high-rate policy and stressed the need for rate cuts.

While avoiding a direct assessment of the possibility of judicial intervention in Fed policy, Bessent made clear that the decision-maker is the White House. He has previously said he considers the Fed an independent institution.

As discussions continue over the selection of the next Fed chair, whether political pressure will again bear on the Fed's independence and the monetary-policy decision-making process is re-emerging as a key issue.