Trump Taps Fed Chief on Iran and AI, Raising Independence Concerns

President Trump has been in contact with Federal Reserve Chair Kevin Warsh since May, The Wall Street Journal reported. Their conversations have centered on the economic impact of the Iran war and artificial intelligence (AI), but have not touched on monetary policy or interest rates.

The 30-year Treasury yield jumped to its highest level since before the 2007-08 financial crisis after the Federal Open Market Committee (FOMC) voted 9-3 to hold rates steady. Three FOMC members had pushed for an immediate hike, and Warsh sidestepped questions about why he disagreed with them.

This comes as investors question Warsh's independence, particularly in light of his evasive answers at a press conference last week. Loretta Mester, the former head of the Federal Reserve Bank of Cleveland, has expressed concerns that Warsh's approach may not be sustainable.