When Kevin M. Warsh, the Federal Reserve chairman, takes the podium for his post-meeting news conference on Wednesday, he is sure to be asked a slew of questions about the thorniest issues facing the U.S. economy.
But there is also an uncomfortable political quandary that he might not be able to avoid: a renewed attempt by President Trump to fire one of Mr. Warsh’s colleagues.
In recent weeks, the White House has redoubled its efforts to oust Lisa D. Cook, a Fed governor, over allegations of mortgage fraud that she has consistently denied. The matter is set to come to a head on Nov. 5, when the administration aims to grill Ms. Cook at an unorthodox, private hearing that her lawyers have said is politically tainted.
Caught in the middle is Mr. Warsh, who has tried to walk a fine line between defending the Fed’s independence, maintaining a good relationship with the president and steering clear of one of the most sensitive issues ever to face his institution. His next steps will carry great weight, given the stakes for the nation’s central bank and its more than century-old mission to set monetary policy free from political influence.
For the moment, Ms. Cook’s fate is unclear. Her lawyers told the White House she could not appear for the November hearing, citing scheduling conflicts and foreign travel. Since then, her lawyers and White House officials have repeatedly declined to say if they were discussing moving the different hearing date or another option entirely.
Nevertheless, the hearing itself is an outgrowth of Mr. Trump’s first attempt to fire Ms. Cook, which she successfully sued to block in a case that reached the Supreme Court. In a June ruling, the justices took no position on the charges against her, but they did say that Mr. Trump should have afforded Ms. Cook a proper chance to respond to them.
Throughout that drama, Mr. Warsh has largely refrained from commenting on the charges against his colleague — or on the president’s general attempts to pressure the Fed into lowering interest rates.
At one point during his confirmation hearing to become chairman, Mr. Warsh was explicitly asked about Ms. Cook’s lawsuit against the president. It had named the Fed board as well as Jerome H. Powell, then the leader of the central bank, as defendants, citing the fact that the Fed could have been required to carry out the firing.
Asked if as chairman he would defend Ms. Cook’s tenure, Mr. Warsh revealed little about his thinking.
“If I stand for anything, it’s the Fed should stay in its lane,” he said, citing the fact that the case at that time had not yet been decided.
He added: “It’s inappropriate for me to weigh in on that, especially because, in the event that I am confirmed, I could be a party to that matter.”
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