Warsh hints at a new reading of the Fed's power over swap lines amid UAE discussion

kevin warsh, the nominee for fed chair, told senate democrats in written answers that the fed's independence doesn't fully apply to international finance. he was responding to questions about swap lines — emergency dollar lending facilities — which have become a hot topic after the uae discussed opening one during talks about potential us help with iran war fallout. treasury secretary bessent said many gulf and asian countries have requested them. warsh wrote that "fed independence is at its peak in the operational conduct of monetary policy" — setting interest rates — but that officials "are not entitled to the same special deference in areas affecting international finance." he said the fed would work with the administration and congress on those matters. he didn't directly answer whether the fed could refuse a treasury request for a swap line. warsh also flatly denied any connection to jeffrey epstein, saying he was on st. barts in december 2010 but didn't meet him. and he signaled he'd defer to the fed's inspector general on the criminal investigation into the fed's building renovation cost overruns. the senate banking committee advanced his nomination on a party-line vote wednesday.