Sahm, a former Federal Reserve and White House economist under the Obama administration, wrote this week that Warsh is towing a challenging line: He “must maintain his support among Republican Senators, avoid rattling financial markets, and convince President Trump to pull the plug on the Department of Justice’s criminal investigation of Powell.”
She also commented on Warsh’s hawkish approach to inflation. He said at Tuesday’s hearing that “true inflation” should be assessed based on long-term price changes, not short-term geopolitical supply shocks.
“If inflation is the Fed’s choice and forecasting is fraught, as Warsh often claims, shouldn’t it be raising rates now to lower inflation?” Sahm wrote.
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