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- Manlobbi
Investment Strategies / Mechanical Investing
No. of Recommendations: 11
President Trump has nominated Kevin Warsh as Fed Chair.
Mr. Warsh has had a long, distinguished career. He is a lawyer rather than a Ph.D. economist.
https://www.wsj.com/economy/central-banking/kevin-...
Kevin Warsh’s Long Road to the Fed Chair
Trump’s pick to succeed Jerome Powell as Fed chair spent years positioning himself for the job
By Nick Timiraos, The Wall Street Journal, 1/30/2026
…
Warsh served for five years on the Fed’s board of governors, helping navigate the central bank’s response to the 2008-09 financial crisis. Since leaving 15 years ago, he has in essays, speeches and interviews highlighted how he thinks the institution has fallen short. …
Warsh has promised a clear rupture—a wholesale rethinking of the Fed’s asset holdings, policy framework, role in the economy, and relationship with the executive branch…
Warsh has put at the center of his candidacy a wholesale revamp of the Fed’s $6.6 trillion asset portfolio, which he has said is too large and should be part of a new accord with the Treasury Department that reduces the central bank’s footprint in money markets. …
In 2010, Warsh argued that by trying to push longer-term interest rates down, the Fed was allowing Congress and the White House to duck decisions he believed they needed to make to put the U.S. on a stronger economic footing. “We should put the burden on them,” Warsh told his colleagues during a tense moment at a November 2010 policy meeting where he privately argued against a bond-buying program being advocated by Bernanke. … [end quote]
https://www.wsj.com/opinion/kevin-warsh-federal-re...
…
This “institutional drift,” as he put it, has caused the Fed to lose the plot on its essential mandate, which is price stability. The Fed has also wandered into fiscal policy with its bond-buying that has underwritten excessive federal spending and asset purchases that contributed to the misallocation of capital. (See the boom in housing prices.) …
Mr. Warsh will steer the Fed away from all that. He will also aim to reduce the Fed’s balance sheet that has ballooned into the trillions of dollars from merely some $800 billion when Mr. Warsh first joined the Fed. He has said fiscal policy is the job of Treasury and Congress, while the Fed should stick to money. … [end quote]
If Mr. Warsh stands by his clear opinions (regardless of pressure from the White House) he will not support fed funds rate cuts if the economy is strong and inflation is persistent.
Even more important, Mr. Warsh has been against the Fed suppressing long-term interest rates by buying bonds with fiat money. (Quantitative Easing.) He will support the roll-off of the Fed’s bloated book of bonds.
This is extremely important since bond investors will read this as a Macroeconomic trend toward higher long-term interest rates. Stock investors will, too – and higher interest rates will lead to lower stock prices.
Wendy
No. of Recommendations: 1
If Mr. Warsh stands by his clear opinions (regardless of pressure from the White House) he will not support fed funds rate cuts if the economy is strong and inflation is persistent.
Even more important, Mr. Warsh has been against the Fed suppressing long-term interest rates by buying bonds with fiat money. (Quantitative Easing.) He will support the roll-off of the Fed’s bloated book of bonds.
This is extremely important since bond investors will read this as a Macroeconomic trend toward higher long-term interest rates. Stock investors will, too – and higher interest rates will lead to lower stock prices.
What has Warsh been saying lately? Can't believe Trump would pick someone he thought would not reduce rates.
No. of Recommendations: 5
Can't believe Trump would pick someone he thought would not reduce rates.
From what I hear, Mr Warsh is an intelligent fellow.
But I think it's safest to plan on the assumption that the pick doesn't matter, and that for all intents and purposes the next chair of the Fed is Mr Trump.
Jim
No. of Recommendations: 0
Mr. Warsh has had a long, distinguished career. He is a lawyer rather than a Ph.D. economist.
Put him in his "element". LOCK HIM UP !!
No. of Recommendations: 0
Can't believe Trump would pick someone he thought would not reduce rates.
Since Pretti got shot, Trump is resolved to stabilize the climate. Warsh is one of the most professional people he can get. If Trump defaults, he needs calm, steady hands in charge. I think Trump's first instinct was to put the army into the cities.
No. of Recommendations: 10
Mungofitch wrote, "I think it's safest to plan on the assumption that the pick doesn't matter, and that for all intents and purposes the next chair of the Fed is Mr Trump."
Once a candidate is approved and sworn in he's in like Flynn.
If he has the superhuman confidence and strength to ignore political pressure and personal insults (like Jerome Powell) the Fed Chair is NOT under the thumb of the president.
Maybe I'm naive. But Warsh is a lawyer, after all. He has the Machiavellian smarts to kowtow and act the perfect sycophant, even contradicting his own expressed beliefs...until he's in. Then he can say what he wants and can't be removed except for cause.
Federal Reserve governors serve staggered, 14-year terms. The whole point is to shield the Fed from political pressure. By the time Warsh's term is over Trump will be dead.
Wendy
No. of Recommendations: 0
Trump needs Warsh. He needs expertise. Trump may have woken up to that fact.
Whether rates are higher or lower, we are insulted by a president insisting on anything. Trump is not the first to insist or work his way.
The good labor market is giving way. One of these meetings policy will change. Trump is killing two birds with one stone. He is blaming the FED and showing his ability.
Trump's ability runs into defaulting on the debt. Only idiots don't make money from a bankruptcy.
No. of Recommendations: 7
He needs expertise. Trump may have woken up to that fact.
Trump has never woken up to any fact - unless it involves his survival or profit in his pocket.
The appointment of Warsh is neither of those; he had to pick somebody , and it had to be someone reasonably competent in order to get confirmed in the Senate. (This one would be more closely scrutinized, even by Republicans, than his so-called “cabinet” picks.) He had several to choose from, and was probably influenced by the drumbeat of criticism Warsh has given over the past few years, not unlike googly-eyes Patel threatening to burn down the FBI headquarters or Kristi shooting her dog.
He could have done worse, of course, and I expected him to, so in the scheme of things this is a win in the end “not as bad as it might have been” camp.
No. of Recommendations: 19
Mungofitch wrote, "I think it's safest to plan on the assumption that the pick doesn't matter, and that for all intents and purposes the next chair of the Fed is Mr Trump."
...
Once a candidate is approved and sworn in he's in like Flynn.
If he has the superhuman confidence and strength to ignore political pressure and personal insults (like Jerome Powell) the Fed Chair is NOT under the thumb of the president... can't be removed except for cause.I laud your optimism, I do.
But I think one should not overestimate the availability of superhuman resistance, nor the depths to which some people might descend in order to exert pressure. The list is endless if you think about it, and you assume no respect for convention. A decree passing monetary policy to an entirely new entity whose board is supine? Giving a different new entity unlimited financial guarantees, so it can purchase a hundred trillion in US paper, driving rates down along the entire yield curve? Inventing a new kind of money to flood the system with liquidity? Applying pressure to the board members or their relatives?
There are no limits, really, so it's just a question of motivation.
Not sure if this link will work. Sincere apologies if it's considered too OT
https://flo.uri.sh/visualisation/27447776/embedJim
No. of Recommendations: 2
Mungofitch wrote, "I think it's safest to plan on the assumption that the pick doesn't matter, and that for all intents and purposes the next chair of the Fed is Mr Trump."
In that case, plan on a fed funds rate of 1%, inflation at 4% (maybe higher), the 10 year Treasury at 5% minimum (and maybe 6% or higher depending on inflation) and gold at $7,000 per ounce (maybe higher).
Wendy
No. of Recommendations: 7
In that case, plan on a fed funds rate of 1%, inflation at 4% (maybe higher), the 10 year Treasury at 5% minimum (and maybe 6% or higher depending on inflation) and gold at $7,000 per ounce (maybe higher).
Possible, but not certain. The Fed Chair is an incredibly important position, but the FOMC is a committee, and the Chair's main power is suasion and not direct authority to decide on his own what the fed funds rate is. The FOMC has a history of trying to reach consensus behind the Chair's guidance, but that is by no means set in stone - and especially if Powell decides to keep his spot on the fed after his term as chair is up, there's a non-trivial chance that the Fed won't just get in line behind what Warsh (and Trump) want them to do.
