Will Besen’s senior aide serve as an adviser to Walsh, with the Federal Reserve cooperating more closely with the U.S. Treasury?

Federal Reserve Chairman Warsh is bringing in key aides from the U.S. Treasury Department, a personnel move that has drawn close market attention to the direction of the relationship between the Fed and the Trump administration.

According to Bloomberg, citing sources familiar with the matter on Thursday, Treasury Secretary Bessent's senior aide Samantha Schwab will join the Federal Reserve as an advisor to Warsh. Schwab served as Bessent's chief deputy chief of staff since April and previously worked in the White House during Trump's first term.

The appointment has struck a nerve with investors. Markets and lawmakers are reassessing whether, under Warsh's leadership, the Fed will forge closer ties with the Trump administration, including the Treasury Department, potentially influencing expectations of monetary policy independence.

Warsh stressed Wednesday that the Fed will maintain autonomy in determining the appropriate policy path. Speaking on a panel at the European Central Bank conference, he said, "We have been an independent central bank for a long time. We will remain an independent central bank at this moment, and you won't see any change in that."

Treasury Senior Aide Transitions to Fed Advisor

Samantha Schwab has served as Scott Bessent's chief deputy chief of staff at the Treasury since April. She joined the Treasury in January 2025 and previously worked in the White House during Trump's first term. Schwab will serve as an advisor to Warsh, but it is not yet clear when she will officially assume the role.

She is also the granddaughter of billionaire and Charles Schwab Corporation founder Charles Schwab, who donated $1 million to Trump's 2017 inaugural fundraising committee.

Although the movement of officials between the Fed and Treasury is not uncommon, the current macro-political environment amplifies the significance of this move. Warsh and Bessent currently maintain the tradition of a weekly meeting between the Fed chair and the Treasury secretary.

With Trump renewing calls for lower interest rates, market sensitivity to the Fed's policy independence has increased. Schwab's transition from the Treasury to the Fed's advisory team may further fuel discussions about the communication boundaries between the two institutions.

Advisory Team Continues to Expand

Schwab's appointment is the latest step in Warsh's efforts to build his advisory team. Previously, conservative policy analysts Paul Winfree and Daniel Heil have joined his advisory bench on a temporary basis.

Paul Winfree served in the White House during Trump's first term and wrote a chapter on the Federal Reserve for the Heritage Foundation's Project 2025, advocating for central bank reforms.

Daniel Heil previously worked with Warsh at the Hoover Institution, focusing on fiscal policy and anti-poverty programs.

Warsh has also appointed two senior Fed economists as advisors. Daniel Covitz is the deputy director of the Fed's Research and Statistics Division, and Eric Engstrom is the deputy director of the Monetary Affairs Division.

Monetary Policy Framework Under Review

Alongside reshaping personnel, the Fed's policy-making mechanism will also undergo a comprehensive assessment. This could have a profound impact on future market communication and interest rate paths.

Warsh revealed Wednesday that the Fed may announce the list of experts for five new working groups next week. These working groups will review multiple aspects of the Fed's monetary policy formulation.

Among them, former Bank of England Governor Mervyn King will co-chair a working group focused on communication mechanisms. These steps indicate that while incorporating external political and fiscal experience, the Fed is attempting to optimize its policy transmission efficiency through systematic review.

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