Vosh's nomination hearing testimony reveals: committed to ensuring strict independence of monetary policy

Note: Federal Reserve nominee Wosh will attend a nomination hearing before the Senate Banking, Housing, and Urban Affairs Committee at 10 p.m. Beijing time on April 21. Politico broke the news early this morning about Wosh’s testimony; Gold Finance Claw has translated as follows:

Mr. Chairman, good morning, and thank you all. It is a great honor to attend today’s hearing, and I also extend my greetings to Senator Warren and all members of the committee. Thank you for taking the time to consider my nomination, and I appreciate the many courtesies extended to me before and after my nomination.

I sincerely thank President Trump for entrusting me with this public duty. He believes that U.S. economic growth and the real income of the people will accelerate. Like the President, I have full confidence in this country and the American people. The potential for U.S. economic growth is rising.

Today, I am here with some of my closest and longest-known friends. I am especially pleased that my wife, Jane, is also present. At important moments in life, I always think of my late parents. I am proud of them and hope to make them proud today.

First, we have reached a broad consensus: this is a critical moment for the national economy, perhaps the most pivotal in generations. If government decision-makers respond with wisdom and clarity at this key juncture, the U.S. economy will thrive.

As a former Federal Reserve Board member and a colleague and friend of the past five Fed chairs, I have a particularly clear understanding of the challenges and opportunities facing the Fed, which I hold dear.

To the President, Congress, and all Americans, I pledge to do my best, guided by the most prudent judgment, to faithfully fulfill the Fed’s mission as entrusted by Congress, including price stability and maximum employment. The American people expect the Fed to deliver on its promises.

Members may be familiar with my educational background and career experience, but what truly shaped me are more personal experiences—those with colleagues and mentors who have benefited me greatly.

I completed high school in northern New York, where I met many excellent teachers and formed lasting bonds with outstanding classmates. It is fortunate to have had good mentors and friends early in my academic and character development. Public education provided me these opportunities, for which I am grateful.

Later, I attended Stanford University, where I was fortunate to work with a distinguished group of economists and policymakers as a student and researcher. Several of my mentors served during a critical period in U.S. history—the stagflation of the 1970s and the recovery periods of the 1980s and 1990s—holding positions in government and related agencies. Former Secretary of State and Treasury Secretary George Shultz, a great patriot of the Hoover Institution, was a mentor and close friend I was privileged to know.

That period of growth was nearly perfect: I learned rigorous thinking, mastered strict statistical and economic analysis, understood geopolitical and economic history, maintained independent thought, resisted trends and groupthink, and gained humility from top experts. Most importantly, I was surrounded by people wholly dedicated to American ideals and aspirations.

The early 1990s Silicon Valley was an ideal backdrop for all this. The U.S. was entering a new era driven by technology, with many emerging entrepreneurs—many of whom were my classmates and later lifelong friends.

I don’t know whether all this was due to coincidence, but I was in the right place at the right time. These early influences established my principles, which I have always strived to uphold in public service and the private sector.

My later colleagues and mentors also exemplified this. Over the past 15 years, I have accumulated solid practical experience in macroeconomics and financial markets, notably working with one of the most successful investors of our time—Stan Druckenmiller.

Stan has never held government office but is equally a patriot. He does not have a Ph.D., but I believe he is one of the most outstanding and open-minded economic thinkers. He quietly supports charitable causes, helping thousands of young Americans access top-tier education and real opportunities for upward mobility.

Like Secretary Shultz, Stan has never given me formal lessons but has provided something more valuable: the opportunity to sit beside him and participate in decision-making.

Without their guidance, and without the other great mentors at the Hoover Institution—including my current boss, close friend, and former Secretary of State Condoleezza Rice—I probably wouldn’t be standing here today as a nominee for Fed Chair. But I am certain of one thing: without these experiences, I wouldn’t be so thoroughly prepared for this urgent and vital task.

Between these significant experiences, I served in government for over a decade, initially in the White House economic staff, then as a Federal Reserve Board member. In fact, nearly 20 years ago, I appeared before this committee as a nominee for Fed Board member.

At that time, none of us—myself included—anticipated that it would be an unprecedented and extraordinary period.

During the global financial crisis, the economy was hit hard, unemployment soared, the financial system was on the brink of collapse, and America’s international standing was challenged. The central bank played an indispensable role. My colleagues and I used policy tools and authorities unique to the Fed, greatly benefiting from the credibility built and passed down by predecessors.

In these extremely severe circumstances, I witnessed the best of the Fed and its staff. I worked alongside dozens of dedicated, talented professionals across Washington and the Reserve Banks, united in our mission under the wise and resolute leadership of Chair Ben Bernanke. We closely collaborated with the Treasury, government, and Congress to mitigate systemic collapse risks—something that was not a given at the time.

Post-crisis, I also saw the institution attempt to play a broader role in the economy and society, expanding its powers and overextending its hard-won credibility. While often well-intentioned, such actions sometimes touched or exceeded the legal boundaries of the Fed’s responsibilities.

The role and responsibilities of a central bank in a republican government have existed since the founding of the United States; fierce debates over central bank independence have a long history as well.

Therefore, I want to make it clear: The independence of monetary policy is crucial. Policymakers must prioritize national interests, and decisions must be based on rigorous analysis, thorough deliberation, and clear judgment.

I do not believe that elected officials—presidents, senators, or representatives—expressing opinions on interest rates pose a substantial threat to the operational independence of monetary policy. Central bank officials must be firm enough to listen to diverse opinions; humble enough to accept new ideas and economic developments; wise enough to turn imperfect data into valuable judgments; responsible enough to make decisions faithfully and prudently.

In short, the Fed’s independence largely depends on the Fed itself. This has three important implications:

First, Congress has entrusted the Fed with the mission of controlling inflation, which must not be shirked, vague, excused, or entangled. Inflation is a choice, and the Fed must be accountable for it.

Low inflation is the “core shield” of the Fed, a key safeguard against various risks. Therefore, when inflation surges—as it has in recent years—American citizens, especially the most vulnerable, suffer serious harm: declining purchasing power, reduced living standards, and possibly losing confidence in the economic governance system, which could undermine the value of monetary policy independence.

Second, the Fed has the highest level of independence in conducting monetary policy, but this independence does not extend to all functions authorized by Congress. In areas such as public fund management, banking regulation, and international finance, Fed officials do not enjoy the same special privileges.

Third, the Fed must strictly adhere to its boundaries of responsibility. Once it oversteps into fiscal and social policies—areas outside its authority and expertise—its independence faces the greatest risk. The Fed should not act as the “omnipotent agency” of the U.S. government, nor as an “appellate court” for matters that should be debated and decided by other branches. The Fed Chair may sometimes wish to have the final say, but the U.S. republic does not operate that way. I advocate for clearer, better-aligned powers and responsibilities for the Fed.

When I served at the Fed before, I said: “Central bank officials must prove they are capable of their responsibilities and steadfastly protect the institution’s credibility. This means respecting our important but limited role in policy-making, fulfilling our mission with professionalism and consistency.” That view remains unchanged.

In summary, I believe that the independence of monetary policy is earned through shielding it from interference, which in turn leads to better decision-making. I am committed to ensuring that monetary policy remains strictly independent in its operations, while also collaborating with the government and Congress on non-monetary matters within the Fed’s scope. I pledge to bear full responsibility for all functions of the Fed.

During my student days, I kept in mind Milton Friedman’s words: “The tyranny of the status quo.” Anyone who has worked in large, complex institutions understands what this means: inertia, defaulting to old patterns, reluctance to re-examine long-held assumptions, relying on outdated models, procrastinating and evading issues.

In today’s rapidly changing world, such conservatism and policy complacency are especially harmful.

If confirmed as Chair, I will draw on my firsthand experience and the critical spirit of questioning as an observer, ensuring the Fed always remembers its boundaries, focuses on its core mission, and fulfills its statutory duties. I will remain loyal to the Constitution, the Federal Reserve Act, and the best traditions of the Fed.

I am familiar with this “battlefield,” and I will be proud to serve again on the Federal Reserve Board. In this most critical period in American history, a reform-oriented Fed can bring tangible change for the American people. The risks we face are unprecedented.

Within and outside government, I am committed to finding common goals and working with colleagues in honesty and cooperation. If confirmed, I will strive to create an environment where talented individuals can achieve their greatest careers.

Honesty and kindness are vital in pursuing our shared goals, and I believe this hearing will test that. It is a great honor to stand before all of you. Thank you all, and I look forward to your questions.