Kevin Warsh Faces Crucial Test: Will He Preserve Federal Reserve Independence Against Political Pressure?

The Federal Reserve stands at a crossroads. Nearly a decade after President Donald Trump first considered Kevin Warsh to lead the nation’s central bank, Warsh now faces the immense task of navigating a treacherous landscape where political pressures threaten to compromise one of America’s most vital economic institutions. Warsh must earn the trust of three powerful constituencies to succeed: his fellow Federal Reserve officials who hold voting power over interest rates; financial markets that are quick to punish perceived political meddling; and most precariously, President Trump himself — a businessman acutely aware of how interest rate decisions impact debt-heavy enterprises,...