Warsh, markets and independence
Why Trump’s Fed pick looks safer than feared
London Business School's Professor Richard Portes says Kevin Warsh’s independent wealth gives him “a kind of independence of thought”, arguing the incoming Fed chair “doesn’t have to worry how monetary policy might affect [his] personal finances”, and is therefore unlikely to bow to presidential pressure. That assessment sets the tone for economists’ broader view that Warsh, a known hawk and former Fed governor, is a steadier, more market-friendly choice than many alternatives floated in Trumpworld.
While Warsh’s optimism on AI, deregulation and balance-sheet shrinkage could put some upward pressure on long-term yields, his well-telegraphed views are seen as a net positive for Fed credibility. In short, not a Trump stooge, but a relatively safe pair of hands, and, for markets at least, a better-known quantity than the rumours that preceded him.
The full article appeared on 30 January in The Banker, here