(Bloomberg) -- Kevin Warsh will respect the independence of the Federal Reserve should he be chosen by President-elect Donald Trump for Treasury secretary, according to Mohamed El-Erian.
Trump’s search for a Treasury secretary has gathered traction in recent days as top contenders jockey for the country’s most powerful economic post. They include Warsh, a former Fed governor, as well as Apollo Global Management Inc.’s Marc Rowan, Tennessee Senator Bill Hagerty and Key Square Group LP founder Scott Bessent. Discussions with the candidates have continued apace this week.
“I suspect that if Warsh gets the job, he will be really careful as to what he says on monetary policy,” El-Erian, the president of Queens’ College, Cambridge, told Bloomberg Television Friday.
Financial markets have responded receptively to the possibility that Warsh, well-known by traders and investors, could be selected by Trump as Treasury secretary. While on the campaign trail Trump has said that he’d like to have greater input into the central bank’s interest-rate setting decisions, Warsh in a 2019 Bloomberg TV appearance called for the Fed to ensure that it is vigilant about its independence.
“Of the four, the one that I have followed most closely is Kevin Warsh,” said El-Erian, also a Bloomberg Opinion columnist. “It’s not often you find someone that can operate at this intersection of economics, finance and policy.”
El-Erian added Friday that the primary challenge for the incoming Treasury secretary will be bolstering US economic growth while also grappling with the maintenance of a growing pile of some $28 trillion in US government debt.
“The best way to address the debt issue is through economic growth,” El-Erian said. “The Treasury secretary will be the lead person in figuring how we navigate all this.”
--With assistance from Annmarie Hordern, Jonathan Ferro and Lisa Abramowicz.
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