‘I didn’t hear an utterance about politics’: Warsh bats away midterm talk following rate decision

Federal Reserve Chairman Kevin Warsh pushed back Wednesday on any suggestion that next week’s midterm elections had a role in the Fed’s decision to keep interest rates steady. He also dodged multiple questions on political topics and pressure coming his way from the Oval Office.

But it wasn’t for a lack of trying from the assembled reporters.

“I appreciate the question, but I’m not going to be responding to quotes from public officials,” Warsh said during a press conference when presented with criticisms from President Trump that interest rates should be lower and that his colleagues on the Federal Open Market Committee were “political.” 

When the subject turned to the midterm elections, Warsh was similarly curt.

“Politics played no role in the decision,” the chair said, adding, “I just spent two days with my colleagues upstairs. I didn’t hear an utterance about politics.” 

He had another political topic to address before it was over when he was asked about a hearing planned for next week of a White House committee investigating allegations against Federal Reserve governor Lisa Cook.

Read more: How much control does the president have over the Fed and interest rates?

It’s the latest twist in the White House effort to remove Cook from the central bank. Warsh was asked if he personally or the Fed as an institution would be involved in those proceedings.

“Not to my knowledge,” he said.

Warsh even seemed wary of weighing in on President Trump’s effort to rebrand artificial intelligence (AI) as super intelligence (SI), answering a question on the topic before quickly noting, “whether you pronounce it AI or SI … is up to you.”

Read more: How jobs, inflation, and the Fed are all related

He defended the central bank’s decision to keep interest rates steady less than a week before the midterm elections and maintained that he is determined to get inflation to 2%.

But the bevy of political questions underscored the meeting’s politically fraught timing, which the Fed has had to navigate before.

The central bank raised rates in 2022 ahead of midterm voting, which Democrats blasted. The Fed then cut rates in 2024, which then-candidate Donald Trump immediately called “a political move to try and keep somebody in office.” 

This time, the central bank held steady. Trump didn’t immediately weigh in on the merits of the decision but told reporters on Wednesday afternoon he had not spoken to Warsh about this week’s decision.

Last month, the president said he had spoken to Warsh before that meeting and has long been vocal about why he thinks interest rates should be lower.

Other elected officials, meanwhile, were quick to comment, with a round of finger-pointing from both sides of the aisle after the interest rates were left unchanged.

Republican Ways and Means Committee Chair Jason Smith pointed at the Fed itself.

“It’s well past time for interest rates to come down … I hope the Fed will bring borrowing costs down soon so we can keep building a stronger, brighter future for American families,” Smith said in a statement.

Democrats also said they wanted lower rates but blamed Trump.

Sen. Elizabeth Warren said in a statement, “Americans deserve lower interest rates and lower costs, but Donald Trump is standing in the way.”

Yet contrary to both sides’ wishes, the Fed’s next move is expected to be a hike. 

The odds in the CME FedWatch Tool, which calculates how traders view upcoming Federal Reserve decisions, priced in a greater than 80% chance on Wednesday afternoon that the Fed will raise rates a quarter point at its next meeting in December.

This story has been updated with additional developments.

Ben Werschkul is a Washington correspondent for Yahoo Finance.