US President Donald Trump has reportedly been in frequent personal contact with Federal Reserve Chairman Kevin Warsh since he took office about three months ago.
The development has sparked concern because the close relationship between the president and the central bank chairman is usually handled more formally to avoid the perception of interference in monetary policy.
According to several sources, Trump contacted Warsh irregularly, including several times in a matter of days before going silent for a period.
Discussions Focused on the Economy
Trump reportedly sought Warsh's views on several key economic issues, including the impact of the Iran conflict and the rapid development of artificial intelligence (AI) technology on the US economy.
However, there is no indication that the two discussed interest rate policy. Sources familiar with the discussions said Trump has never touched on the issue of interest rates since Warsh was confirmed by the Senate as Fed Chair.
According to US practice, the Fed operates independently of the presidential administration even though its chairman is appointed by the White House. This independence is intended to ensure that monetary policy decisions are made without being influenced by political interests.
A Different Relationship Than Previous Presidents
The relationship between Trump and Warsh is seen as different from the more cautious practices of previous presidents in dealing with the Fed chair.
During his first term, Trump often criticized former Fed Chairman Jerome Powell for refusing to lower interest rates as he wished. He even threatened to fire Powell several times and described his communication with him as ineffective.
In contrast, Trump now reportedly sees Warsh as a trusted economic advisor. Ahead of the Fed's decision last week to keep interest rates on hold, Trump also praised Warsh and expressed confidence that he would make the best decision.
Warsh, meanwhile, has consistently portrayed the US economy as strong, with business investment growth continuing to be the main driver of the country's economic performance.
