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\n

The Federal Reserve just made congressional Republicans\u2019 lives even harder in the run-up to the November midterm elections. But they\u2019re holding their fire on Fed Chair Kevin Warsh.<\/p>\n

The Fed this week hiked interest rates<\/a> for the first time since Warsh took over as the central bank\u2019s leader. The central bank’s unanimous decision to increase borrowing costs threatens to worsen the growing problems Republicans face around voters\u2019 views of the economy and the high cost of living.<\/p>\n

But some GOP lawmakers indicated they were relieved to see Warsh\u2019s willingness to buck President Donald Trump after he faced withering criticism during his confirmation process from Democrats, who said he would do the president\u2019s bidding in the role.<\/p>\n

\u201cThe Fed has to be independent. They showed that they were independent,\u201d said Sen. Mike Rounds<\/a>, a South Dakota Republican who is up for reelection. \u201cThat should give confidence to the markets.\u201d<\/p>\n

Republicans\u2019 willingness to give Warsh room \u2014 despite its potential political downsides for them \u2014 highlights their deference to the new Fed chief.<\/p>\n

\u201cIt\u2019s not good,\u201d said Sen. John Cornyn<\/a>, a Texas Republican who lost a primary earlier this year to a Trump-backed opponent. \u201cBut it\u2019s a fact that they need to get inflation under control. But the timing is not optimal.\u201d<\/p>\n

The decision to hike rates comes amid an uneasy dynamic where the Fed is taking action to tamp down rising inflation while Trump wants to see the economy boosted by cheaper borrowing costs. Republican lawmakers, meanwhile, are caught between supporting Trump\u2019s economic agenda and voicing confidence in Warsh\u2019s ability to bring inflation under control.<\/p>\n

Sen. Katie Britt<\/a> (R-Ala.), a staunch supporter of the president who sits on the Senate Banking Committee, said that while she and Warsh \u201cmay have a different opinion on how we achieve a place where ultimately interest rates are low\u201d and that she’d \u201clove to see [lower rates],\u201d she \u201ctrust[s] what [Warsh] is doing, and appreciate[s] the independence of the Fed.\u201d<\/p>\n

Warsh was tapped by Trump for the job in January with the hope that he would lower rates. However, since he was nominated, the U.S. entered into a conflict with Iran, high tariffs continued and gas prices soared, among other inflation and affordability concerns.<\/p>\n

Trump-aligned lawmakers are cautioning against moving too aggressively to increase borrowing costs \u2014 but they are doing so gently.<\/p>\n

Sen. Bill Hagerty<\/a> (R-Tenn.) said in an interview that Warsh is \u201cunder a tremendous amount of pressure,\u201d pointing to other Fed officials\u2019 support for a hike.<\/p>\n

\u201cI understand the concerns about inflation, but I do think there\u2019s a significant component of inflation that will be addressed as we address the situation in the Middle East,\u201d Hagerty said.<\/p>\n<\/div>\n","protected":false},"excerpt":{"rendered":"

The Federal Reserve just made congressional Republicans\u2019 lives even harder in the run-up to the November midterm elections. But they\u2019re holding their fire on Fed Chair Kevin Warsh. The Fed this week hiked interest rates for the first time since Warsh took over as the central bank\u2019s leader. The central bank’s unanimous decision to increase […]<\/p>\n","protected":false},"author":2,"featured_media":0,"comment_status":"open","ping_status":"closed","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[3],"tags":[],"class_list":["post-27185","post","type-post","status-publish","format-standard","hentry","category-congress"],"amp_enabled":true,"_links":{"self":[{"href":"https:\/\/bluelightnews.com\/category\/politics\/wp-json\/wp\/v2\/posts\/27185","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/bluelightnews.com\/category\/politics\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/bluelightnews.com\/category\/politics\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/bluelightnews.com\/category\/politics\/wp-json\/wp\/v2\/users\/2"}],"replies":[{"embeddable":true,"href":"https:\/\/bluelightnews.com\/category\/politics\/wp-json\/wp\/v2\/comments?post=27185"}],"version-history":[{"count":0,"href":"https:\/\/bluelightnews.com\/category\/politics\/wp-json\/wp\/v2\/posts\/27185\/revisions"}],"wp:attachment":[{"href":"https:\/\/bluelightnews.com\/category\/politics\/wp-json\/wp\/v2\/media?parent=27185"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/bluelightnews.com\/category\/politics\/wp-json\/wp\/v2\/categories?post=27185"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/bluelightnews.com\/category\/politics\/wp-json\/wp\/v2\/tags?post=27185"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}