Banking industry round liked Warsh’s ‘tone’ in first testimony as Fed chair

Sen. Mike Rounds, R.S., a member of the Senate Banking Committee, said Thursday on CNBC’s “Squawk Box” that Federal Reserve Chairman Kevin Warsh struck the right tone when he appeared before the committee this week.

“I think his message was a good message. He started talking about the need to control inflation and the Fed’s focus on that,” Lowndes said. “So I think we’re on the same playing field as what Kevin Warsh wants.”

Warsh, who took over as Fed chairman in May, visited Capitol Hill for two days of testimony this week, taking questions on inflation and central bank independence before the House of Representatives on Tuesday and before a Senate committee on Wednesday.

President Donald Trump appointed Warsh after a long campaign against his predecessor, Jerome Powell, to lower interest rates. The Fed left interest rates unchanged at Warsh’s first meeting as chairman in June.

“I’d like to see inflation go down and 30-year mortgage rates go down,” Lowndes said. “That’s important. But it’s what we have to do over the long term, and I think the Fed is right… to keep rates where they were.”

Mr. Rounds praised Mr. Warsh’s focus on inflation, saying it is consistent with efforts Congress has made recently to lower consumer costs and cushion the impact of rising costs, including the recent passage of major housing policies aimed at lowering costs for homebuyers and renters and curbing the role of institutional investors in the ownership of rental housing.

In his testimony this week, Mr. Warsh sought to emphasize his independence from the White House, which has been called into question by Mr. Trump after months of taunting Mr. Powell over interest rates. President Trump has threatened to fire Powell, and his administration has launched a criminal investigation into the then-Fed Chairman.

“We want independence from the Federal Reserve. We want them to make decisions based on what they believe is right,” Rounds said.