Hassett: Warsh will take over as Fed chairman as planned

Kevin Hassett, director of the White House National Economic Council, expressed confidence on Thursday that US President Donald Trump's nominee, Kevin Warsh, will take over as chairman of the Federal Reserve as planned, i.e. in May. He added that the current head of this institution, Jerome Powell, will not remain on the Fed's Board of Governors.

Trump's adviser expressed his belief in an interview with Fox Business that despite potential obstacles to Warsh's confirmation as Fed chairman, he is “highly confident” that he will take office on May 15, i.e. when Powell's term expires.

Hassett assured that the White House would “reach an agreement” with Republican Senator Thom Tillis, who has so far blocked Warsh's candidacy due to the ongoing federal prosecutor's investigation against Powell.

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The investigation was suspended when a federal judge blocked Fed board members' subpoenas to testify because it found the investigation into the high costs of renovating Fed buildings to be politically motivated and lacking evidence. The Ministry of Justice appealed against this decision, and Tillis, who also considered the investigation an attack on the Fed's independence, announced that he would block Warsh's nomination until the case was completely discontinued.

Powell's term as chairman expires in May, but by law he has the right to remain on the Fed's Board of Governors until 2028. Although in practice the outgoing president also stepped down from the Board, Powell announced in March that he had not made a decision on this matter. Still, Hassett on Thursday expressed confidence that “when the new president is confirmed, he will step aside – and that is the right attitude.”

Hassett said that interest rates should be lower and that the current spike in oil prices is a “supply shock” and the Fed should not respond with rash increases despite rising prices. He assessed that Warsh probably shared this view.

According to Trump's adviser, the war with Iran has opened up new opportunities for American exports of energy resources. As he admitted, US allies are already signaling interest in long-term contracts for the purchase of American oil and gas, the so-called offtake agreements that would provide them with safer supplies, independent of the unstable Persian Gulf region.

Hassett also maintained the GDP growth forecast at 4-5%. this year, calling the conflict with Iran a “temporary disruption.” He announced that once the Strait of Hormuz opens, oil prices will quickly return to normal.

He also denied Iranian suggestions that the peace talks planned for the coming days are meaningless given Israel's violations of the ceasefire.

– If they just behave normally – hopefully with cooler heads and stronger minds prevailing on the Iranian side – we will reach a final agreement this weekend, Hassett said.

From Washington Oskar Górzyński (PAP)

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