Warsh Should Know That Fighting Unemployment Is Also the Fed’s Job

At his confirmation hearing last week, Kevin Warsh dodged questions about interest rates, tariffs and the 2020 election. As his nomination to be chair of the Federal Reserve heads toward confirmation after clearing the Senate Banking Committee Wednesday, it’s worth focusing on an equally troubling gap in his public record: his near silence on anything related to employment.

Warsh gave a perfunctory nod to the Fed’s dual mandate — price stability and maximum employment — in last week’s testimony, but while he extensively discussed the former, he essentially ignored the latter. The two goals, enshrined into law in 1977, are coequal under the statute, but in practice, the Fed has historically given precedence to price stability. As Fed Chair Paul Volcker put it in 1981: “We will not be successful, in my opinion, in pursuing a full employment policy unless we take care of the inflation side of the equation.” Over the past 20 years, the Fed has moved away from that inflation-first view, building a more rigorous understanding of what maximum employment means and how to pursue it.