Trump officially nominated Kevin Warsh as the next Chair of the Federal Reserve.
He’s built a reputation as an inflation hawk.
He’s warned for years about easy monetary policy.
He’s warned about rising prices.
He’s warned about asset bubbles.
He’s even warned about the Fed stepping in too often and distorting markets.
And yet, he’s said something that sounds almost contradictory.
He’s said the Fed should cut rates. Well no wonder he’s the pick..
His argument is that the Fed’s $6.6 trillion dollar balance sheet fundamentally changes how policy works.
When the Fed is shrinking its balance sheet — pulling liquidity out through QT — policy is tighter than it suggests.
So in his view, rate cuts don’t automatically mean easing.
They can simply offset balance sheet tightening.
His next steps are to:
1. Go before the Senate Banking Committee
- If advanced, the full U.S. Senate votes
- Simple majority (51 votes) confirms him. Then he’s good to go.
If the Senate:
- Votes NO, or
- Never brings him to a vote
Then:
✅ Trump can Nominate someone else immediately
This can be someone like Waller, Reider, Hassett OR ANYBODY ELSE!
Something I’ve noticed is that Trump tends to go about things in ways that raises questions or concerns so I don’t think the chance of Warsh getting denied is 0% at all.
It almost aligns with the way Trump has been known to ack as president so far. Constant changing mind, presenting something else, or getting blocked at doing something. Not saying this will happen but the more today’s volatility took over the markets… I wouldn’t be surprised if Warsh won’t be the chair.
Maybe even Jerome Powell holds Chair a little bit longer…?