According to sources familiar with the matter, since Wessel took office as Fed Chair less than three months ago, Trump has made multiple calls to the central bank leader to seek advice on a wide range of issues, from a potential war with Iran to the impact of artificial intelligence—breaking the long-standing norm of “formal and restrained” contact between presidents and Fed chairs over the past several decades.
According to The Wall Street Journal, sources familiar with the matter said that President Trump has made multiple phone calls to Kevin Warsh since his appointment as Chair of the Federal Reserve, establishing a more direct line of communication between the president and the central bank governor. This approach differs from the relatively restrained interactions between U.S. presidents and Federal Reserve chairs over the past several decades.
According to insiders, the calls between Trump and Wash were not scheduled on a fixed basis, but rather occurred intermittently in bursts—sometimes multiple calls in consecutive days, followed by long periods with no contact.
Some individuals with partial knowledge stated that Trump consulted Wash on multiple economic and policy-related issues, including the possibility of war with Iran and the potential economic impact of rapid advancements in artificial intelligence. Wash has been in office for less than three months.
It is unclear whether monetary policy was discussed between the two parties. A person familiar with the conversation said that since Walsh’s Senate confirmation, Trump has never mentioned interest rates in their communications.
Trump emphasized independence, but his communication style broke with traditional norms.
The President of the United States has the authority to nominate the Chair of the Federal Reserve, but the Federal Reserve is responsible for independently setting interest rate policy. This institutional arrangement is designed to prevent political influence over critical decisions affecting the cost of borrowing across the entire economic system.
It is not uncommon for the president to meet occasionally with the chair of the Federal Reserve, but over the past several decades, such interactions have typically been pre-scheduled and more formal, to avoid the perception that the White House is influencing monetary policy.
Trump is accustomed to maintaining contact with a broad network of individuals, including foreign leaders, corporate executives, and members of Congress, through his personal phone, rather than relying entirely on traditional government communication channels.
Throughout U.S. history, some presidents have maintained close relationships with the Chair of the Federal Reserve. For example, Bill Clinton greatly admired Alan Greenspan and seated him beside First Lady Hillary Clinton during his first joint address to Congress.
In contrast, Joe Biden had fewer interactions with Jerome Powell during his tenure. Presidents from Clinton to Barack Obama also avoided publicly pressuring the Federal Reserve.
Communications between the White House and the Federal Reserve Chair were more frequent in the 1960s, when regular meetings were held. However, during Richard Nixon’s presidency, pressure exerted by the president on Fed Chair Arthur Burns is widely believed to have worsened inflation in the 1970s, leading to a gradual reduction in direct contact between the two.
After entering the 1980s, communication between the president and the Federal Reserve Chair primarily occurred through the Secretary of the Treasury.
Wash is regarded by Trump as an economic advisor, in contrast to Powell's treatment.
Trump’s past stance on the independence of the Federal Reserve has been controversial. In a December interview with The Wall Street Journal, he said he hoped the Fed Chair would consult with him on interest rate decisions.
At the time, Trump said: "I am a wise voice that should be heard."
However, when Walsh was sworn in as Fed chair, Trump publicly expressed a different stance, saying: "I want Kevin to be completely independent. Don’t look at me, don’t look at anyone. Just do your job and do it well."
Some insiders said that during conversations with Trump, Wash frequently expressed a positive outlook on the economy, consistent with his public statements.
Wash said last week at the Federal Reserve press conference: "The most notable feature of the economy is the strong growth in business investment."
Trump has told political allies that he views Wu as a valuable external economic advisor, a clear departure from his previous stance on Powell.
In 2017, Trump considered Warsh when choosing a Federal Reserve chair but ultimately appointed Powell. Subsequently, Trump repeatedly criticized Powell, calling him "too late," accusing him of both failing to cut rates promptly and of cutting them insufficiently. Trump also repeatedly threatened to fire Powell and compared his communications with him to "casting pearls before swine."
In contrast, Walsh has not faced similar public criticism. Before the Federal Reserve's decision last week to hold rates steady, Trump praised Walsh, saying he knew Walsh wanted to do the “right thing,” but also criticized him for having a board whose members are highly politicized.
Powell remains a member of the Federal Reserve Board, continuing in his role after the conclusion of his chairmanship.
A person who heard Trump speak in person revealed that Trump often praised Wash’s appearance after seeing him on TV.
Since returning to Washington, Wash has become a regular fixture in political circles, much like Greenspan’s longstanding role in Washington’s social scene.
According to Politico, Wash had dinner on Tuesday at a popular Georgetown restaurant with Dan Driscoll, an ally of Vice President Vance and the Secretary of the Army.
Last month, Wash also attended a dinner hosted for Vance’s incoming chief of staff, Nick Luna, and Vance’s national security advisor, Cliff Sims.
The close ties between Trump and Walsh have also raised concerns among outsiders about the independence of the Federal Reserve. Democratic members of the Senate Banking Committee, which oversees the Federal Reserve, have repeatedly requested that Walsh disclose more information about his interactions with Trump.
The White House stated that Trump supports the Federal Reserve's independence.
White House spokesperson Kush Desai stated in a statement: “President Trump has repeatedly emphasized that he is giving Chair Wash the space needed to restore confidence and capacity in the Fed’s decision-making. While the President, as a U.S. citizen, has First Amendment rights, and as Commander-in-Chief has a responsibility to express his views on the Fed, he has also repeatedly reaffirmed the independence of Chair Wash and the Fed.”
The Federal Reserve declined to comment.
Wash faces a critical test: Can his relationship with the president withstand policy differences?
Powell adopted a more cautious approach when facing pressure from Trump. He answered calls from Trump and had dinner with him at the White House in 2019, but their interactions were limited, and all related meetings and calls were disclosed.
Powell's critics argue that his approach of distancing himself from the White House has exacerbated tensions between the two sides, and believe that if Powell had made Trump feel heard, relations could have improved without changing policy positions.
Wash established a more direct line with Trump, seen as a different strategy aimed at reducing the perception of tension between the Federal Reserve and the White House through communication.But whether this relationship becomes an advantage or a risk will depend on how Wash navigates future conflicts between Federal Reserve policy judgments and Trump’s preferences.
Last week, the Federal Reserve decided to keep interest rates unchanged. Waugh stated at the press conference that if inflation remains high, raising rates “is likely to become” one of the policy options.
However, he emphasized that the Federal Reserve can strengthen its ability to control inflation by convincing the public of its firm commitment to achieving its 2% inflation target.
Market data shows that short-term U.S. Treasury yields have declined while long-term U.S. Treasury yields have risen, indicating that investors believe the future policy path is slightly more accommodative than before the meeting, while inflation expectations are slightly higher.
Ellen Meade, a professor at Duke University and former Federal Reserve economist, said she previously expected Waugh’s relationship with Trump might lead him to push for Fed rate hikes when conditions allowed, but her assessment has changed since last week’s press conference.
At the April confirmation hearing, Wash stated that the Federal Reserve's independence "depends on the Federal Reserve itself." He believes that the Fed's independence is not threatened when elected officials express their views on interest rates.
Last month, when Maryland Democratic Senator Chris Van Hollen asked Waugh whether he would publicly disclose his schedule, including presidential contacts, as Powell had done, Waugh stated that he would comply with the law and declined to confirm whether he had spoken with Trump.
Wash said: "Before I took office, before I raised my right hand, the president did not attempt to influence the implementation of monetary policy. If he had tried, I would have continued focusing on doing my job."