Banking’s Rounds liked Warsh’s ‘tone’ in first testimony as Fed chair

Sen. Mike Rounds, R-S.D., a member of the Senate banking committee, said on CNBC’s “Squawk Box” on Thursday that Federal Reserve Chairman Kevin Warsh used the right tone in his speech before the panel this week.

“I think his message was a good one. He started by talking about the need to get inflation under control and the Fed’s focus on that,” Rounds said. “So I think we’re in the playing field where Kevin Warsh wants to be.”

Warsh, who took over as Fed chairman in May, testified on Capitol Hill for two days this week; He fielded questions about inflation and the independence of the central bank, first in the House of Representatives on Tuesday and then before a Senate panel on Wednesday.

Trump appointed Warsh after a long campaign to lower interest rates against his predecessor, Jerome Powell. The Fed kept interest rates steady at Warsh’s first meeting as chairman in June.

“We would love to see inflation go down and 30-year mortgage interest rates go down,” Rounds said. “This is critical. But this is the long-term thing to do, and I think the Fed is right… keeping rates where they were the first time.”

Rounds praised Warsh for focusing on inflation; said this is consistent with Congress’ work to drive down consumer costs and mitigate the effects of rising costs; this includes recently passing a widening housing package aimed at lowering costs for home buyers and renters and reining in the role of institutional investors in rental home ownership.

In his testimony this week, Warsh sought to emphasize his independence from the White House, which was questioned after Trump spent months haranguing Powell on interest rates. Trump had threatened to fire Powell, and his administration launched a criminal investigation into the then-Fed chairman.

“I want the Federal Reserve to be independent. I want them to make their decisions based on what they believe is right,” Rounds said.