Buffett backs Kevin Warsh as Fed chair after rate-hold debut

Warren Buffett said Federal Reserve Chair Kevin Warsh was a “good choice” for the role, offering support for President Donald Trump’s nominee as the central bank faces pressure to deliver 2% inflation while preserving maximum employment. Warsh, who took over in May after congressional confirmation, held interest rates steady at his first meeting in June and has promised changes to the Fed’s policy approach, according to CNBC.

Buffett made the comments in an interview with Becky Quick on CNBC’s “Squawk Box.” His remarks came after Warsh testified before Congress on Tuesday and ahead of an appearance Wednesday before the Senate Banking Committee.

“I think he will do the best he can at achieving the job he was assigned to do, which is 2% inflation and maintaining maximum employment,” Buffett told CNBC.

The Fed’s dual mandate gives the chair a central role in setting the policy path for the world’s largest economy. Decisions on whether to raise, lower or hold rates influence financial conditions across credit, equities, currencies and government debt, even as policymakers frame their choices around inflation and labor-market outcomes.

Warsh signals a policy shift

Warsh used his first rate-setting meeting as chair in June to keep rates unchanged while outlining changes to the central bank’s approach, CNBC reported. In congressional testimony Tuesday, he pledged what he called a “regime change” in Fed policy and said he would address inflation.

The 2% inflation goal cited by Buffett is the Fed’s stated price-stability objective. Maximum employment, the other side of the mandate, is less tied to a single numerical target and requires policymakers to assess labor-market conditions alongside inflation data.

Buffett also cautioned that the role does not allow for flawless execution. “He can’t be perfect at it, and just like I know I couldn’t be perfect at taking people’s money and earning super returns on it,” he said, according to CNBC.

Warsh’s elevation followed a nomination by Trump and confirmation by Congress, CNBC reported. His early tenure has drawn attention from investors and policymakers because of his stated intent to alter the Fed’s operating approach while pursuing lower inflation.

Buffett emphasizes judgment

Buffett, the longtime Berkshire Hathaway chief executive, framed his assessment around Warsh’s public service rather than a specific policy forecast. “He cares about the country,” Buffett told CNBC. “I think that’s been true of a good many. It doesn’t mean their decisions are always great, but because sometimes the decisions are so tough.”

Warsh’s next appearance on Capitol Hill will give senators an opportunity to question him on the policy changes he has outlined, his inflation strategy and how he intends to balance the Fed’s employment mandate with price stability. CNBC reported that he is scheduled to testify before the Senate Banking Committee on Wednesday.

This story draws on original reporting from CNBC.