Today, Kevin Warsh testifies before the US Senate on his nomination to lead the Board of Governors of the Federal Reserve System; Amit Seru argues that policy uncertainty from the Trump administration is undermining its own economic agenda as well as the nation’s economy; and Russell Berman speaks with a prominent German politician about how the US war in Iran intersects with Germany’s foreign policy objectives.
Answering Challenges to Advanced Economies
Distinguished Visiting Fellow Kevin Warsh was on Capitol Hill today testifying before the US Senate regarding his nomination to serve as the next chairman of the Board of Governors of the Federal Reserve System. Warsh says he plans to provide the nation with his “best judgment and most faithful efforts in serving the mission Congress assigned to the Fed, including price stability and full employment.” Warsh also reflected on the wisdom he received from the late Hoover Senior Fellow George Shultz, testifying that the late secretary of state and of the Treasury was among “the great patriots at the Hoover Institution who I came to know as mentor and friend.” Warsh emphasized that in his view, “monetary policy independence is essential” and that “monetary policy independence is earned—and better policy decisions crafted—by steering clear of distractions.” Concluding his written testimony, the former central bank official said, “If confirmed as chairman, I will seek to bring the experience of a one-time insider and the questioning spirit of an outsider.” Read more here.
Economic Policy Uncertainty
At The New York Times, Senior Fellow Amit Seru writes that despite the Trump administration’s embrace of industries like AI and efforts to reduce taxes and regulations, “the payoff is far smaller than many business leaders expected, and our economy is losing momentum.” Seru argues this is not difficult to explain: “Mr. Trump’s constant policy swings are offsetting whatever benefits his business-friendly instincts might bring.” The Stanford finance professor elaborates that firms and markets can “adapt to change,” but “they cannot function under . . . constant chaos.” In the piece, Seru traces how policy uncertainty negatively impacts innovation, investment, and hiring, leading to a less dynamic and slower-growing economy. Seru concludes that any corrective policy response “requires restraint, not just from those in power, but also from those seeking to reverse course, so that policy changes do not set off equally destabilizing countershifts.” Read more here. [Subscription required.]
International Affairs
At The Caravan Notebook, Senior Fellow Russell Berman interviews Roderich Kiesewetter, a former German military officer and current member of Germany’s Christian Democratic Union party. Responding to arguments that the Iran war is not Germany’s problem, Kiesewetter says such a view “is strategically shortsighted and extremely dangerous. Our citizens feel the immediate impact of this every day at the gas pump through rising energy prices.” He further argues that if Germany wants to preserve its “prosperity, then—alongside domestic reforms—we need the unwavering resolve to assert our interests abroad. This includes the freedom of the seas, which must be non-negotiable for us.” Berman also asks Kiesewetter about China’s role in the conflict and Europe’s lack of readiness to repel a Russian attack. “We can only achieve genuine deterrence and defensive capability if—following a Ukrainian victory—we firmly integrate Ukraine into the European security architecture and NATO,” Kiesewetter argues. Read more here.
Education
In a new op-ed for The Hill, Senior Fellow Paul E. Peterson says that after changes in the scoring of Advanced Placement tests, “the share of students earning the top score of 5 has risen by about 60 percent in just four years; the share earning a passing score of 3 or higher has climbed by roughly 37 percent.” Peterson argues this score inflation threatens the use of AP scores as markers of high academic achievement and subject matter mastery. As he notes, “AP scores carry real academic and financial weight” in college admissions and beyond. After identifying the financial incentives driving the College Board, the maker of AP tests, to relax scoring standards and effectively lower the bar of achievement, Peterson remarks, “AP remains influential, but it is no longer a uniform, stable check on grade inflation.” Read more here.
Security and Defense
On a new episode of Secrets of Statecraft, Christian Brose, president and chief strategy officer at Anduril Industries, speaks with Andrew Roberts about the future of defense technology and production. Brose argues that despite massive defense spending, the United States is dangerously unprepared for a prolonged, high-intensity war, having built a military optimized for short conflicts—with expensive, hard-to-replace weapons—rather than for sustained attrition. He explains how decades of procurement choices, limited industrial capacity, and lack of competition have left munitions stockpiles thin, while emerging conflicts in Ukraine and the Middle East highlight the growing importance of mass, low-cost, and autonomous systems. The conversation explores the need for a new “high-low mix” of capabilities, the still cautious approach to AI’s transformative role in warfare, and the strategic challenge posed by China’s industrial model. Brose explains his view that the core issue is not just process but leadership—the willingness to rethink assumptions and rapidly adapt to the changing character of war. Listen here.
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