Richard Clarida said he met with President Trump before his nomination.
The nominee to be the vice chairman of the Federal Reserve said Tuesday that President Donald Trump gave him no reason to worry about the erosion of the political independence of the central bank.
Clarida said that he met with the president prior to his nomination.
“I had a number of meetings over several months with a number of officials, including the president, and in no meeting, and at no time, did I have any reason to question the independence of the Federal Reserve,” Clarida said.
Asked by Sen. Bob Menendez, a Democrat from New Jersey, whether Trump had asked him how he would vote on interest rate hike, or expressed a preference on how he should vote, Clarida replied: “Absolutely not.”
Clarida said he would ignore any political pressure on monetary policy. The Pimco executive and professor at Columbia University called the Fed’s political independence is “essential.”
Fresh concern about the Fed’s independence resurfaced last week after former Fed Gov. Kevin Warsh, a candidate to replace Janet Yellen as Fed chair, told Politico that Trump pressed him for a commitment to keep rates low.
“Not since Richard Nixon has a president blatantly attempted to pressure a Fed chairman,” said Greg Valliere, chief global strategist at Horizon Investments.
“Whether Trump would be that blatant with [Fed chairman Jerome] Powell remains to be seen, but Warsh said the issue of Fed independence appears to be of little importance to Trump, who apparently thinks the Fed works for him,” Valliere said.
Michelle Bowman, a bank regulator from Kansas, who also has been nominated to the Fed, told the same hearing that “politics has no place” at the central bank.
Bowman said she did not meet with Trump before being nominated.
The sharpest exchange at the hearing came when Sen. Elizabeth Warren pressed Clarida for his position on a new Fed proposal to lower bank capital requirements.
Clarida replied that he had not “studied” the proposed rule in detail.
Warren, a Massachusetts Democrat, reacted incredulously, and said it would be hard for her to assess his nomination.
“I am concerned about your lack of background on regulatory issues and I am concerned about your unwillingness today to support strong capital standards for big banks,” Warren said.
Despite Warren’s concerns, analysts see wide support for Clarida and Bowman on the Banking Committee. However, the tension in the Senate between the two parties over nominations from the Trump White House meant there was some chance that Bowman and Clarida might not join the central bank until late this year.