Our Hot Take: It’s Warsh

Trump has nominated Warsh for Fed chair. He is a man of great integrity, intelligence and heart. Warsh will not be compliant as Waller would have been. He is not a MAGA warrior like Miran, nor a politico like Hassett. He can easily get through the GOP Senate where is a known quantity, and understood as not beholden to Trump. Indeed, we are not sure why Trump would pick up. He has said he favors lower interest rates, but everyone including Powell does. By disposition he is a hard-money advocate in the canonical Republican mode, having come up through the Bush administration and worked for over a decade with Druckenmiller. He wants to radically shrink the Fed’s balance sheet and roll back the Fed’s “mission creep.” Markets, particularly gold may go risk-off a bit in disappointment Trump didn’t pick more of a dove, but we don’t have a dove now either. Given the Trump-Powell rivalry, we’re not sure why Warsh would want to do this. We’re glad he is answering the call to adventure.