Warsh Says Fed Independence Is ‘Essential,’ But Limited

Kevin Warsh, a candidate to be the next Federal Reserve chair, said independence for the central bank is “essential.”

But, he added, the Fed under Jerome Powell has strayed into policy areas where it lacks authority.

Kevin Warsh

Photographer: Tierney L. Cross/Bloomberg

“History tells us that the independent operations in the conduct of monetary policy is essential,” Warsh said Thursday in an interview on CNBC. “But that doesn’t mean the Fed is independent in everything else it does.”

Warsh, who as a Fed governor from 2006 to 2011 consistently pursued a hawkish interest-rate policy aimed at fighting inflation risks, has this year argued for ...