As the confirmation hearings for President Donald Trump’s nominee to lead the Federal Reserve approach, Democrats are planning to focus on his finances, the Wall Street Journal reported on Monday evening.
“In a preconfirmation filing last week, Warsh disclosed assets worth more than $100 million but declined to identify the underlying holdings of his largest individual investments, citing confidentiality agreements,” reported Matt Grossman and Nick Timiraos. “The Office of Government Ethics conditionally certified the filing, noting it complies with federal ethics law for all but several dozen holdings. It said Warsh will be in compliance only after he divests those holdings, which Warsh has agreed to do if he is confirmed.”
“That opacity is the central complaint in a staff memo circulated by Senate Banking Committee Democrats and reviewed by The Wall Street Journal,” said the report. “‘Without the ability to review Mr. Warsh’s holdings in public and in detail, it is impossible to determine whether Mr. Warsh is holding an interest in institutions he would be responsible for regulating as Fed Chair,’ the memo said.”
Of particular importance to Democrats’ probe is that “Warsh’s largest reported investments are stakes in a fund run by investor Stanley Druckenmiller, for whom Warsh has worked. That fund, Juggernaut, has recently appeared to hold shares in Fed-regulated bank companies,” said the report. Fed officials are legally prohibited from owning stock in banks regulated by the agency.
All of this comes amid the broader question of how Trump has attempted to use politically charged investigations to jawbone the Fed, and outgoing Chair Jerome Powell specifically, into lowering interest rates even amid a high-inflation environment.
At least one Republican lawmaker, Sen. Thom Tillis (R-NC), has threatened to hold up any Fed appointments, including Warsh, if Trump does not back off this legal pressure on the central bank.
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