Rounds Praises Warsh's 'Tone' in First Fed Testimony
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- Sen. Mike Rounds (R-S.D.), a Senate Banking Committee member, said on CNBC's "Squawk Box" Thursday that Fed Chair Kevin Warsh delivered the right message in his first appearance before the panel, citing Warsh's focus on getting inflation under control
- Kevin Warsh testified before the House on Tuesday and the Senate Banking Committee on Wednesday, fielding questions on inflation and central bank independence in his first congressional hearings since becoming Fed chair in May
- The Federal Reserve held rates steady in June at Warsh's first meeting as chair, a decision Rounds endorsed, saying the central bank is "correct" to maintain rates while waiting for inflation to come down
- Warsh emphasized the Fed's independence from the White House during testimony, a topic under scrutiny after Trump threatened to fire predecessor Jerome Powell and his administration launched a criminal investigation into the then-chair
- Rounds commended Warsh for prioritizing inflation, linking it to Congress's recent passage of a housing package aimed at lowering costs for homebuyers and renters and curbing institutional ownership of rental homes
Why it matters: A Republican on the Senate Banking Committee publicly endorsing Warsh's approach — including the June rate hold — gives the new Fed chair political cover as he navigates his first months, while Rounds's insistence on Fed independence echoes the very boundary Warsh himself drew against White House pressure in his testimony.
