What Impact Will New Fed Chair Warsh Have on Policy?

Speaker: 00:00:00

Fed chairperson, it's, it's, it's a

really interesting pick to have wars

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because wars, if you go off his voting

track record and his vocalization of

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policy, he seems to be antithesis of

what Donald Trump wants of cutting rates.

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Now, obviously to get the job, you had

to at least tell him that at one point.

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So I'm sure that happened somewhere.

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: 00:00:20

But you know, he, he's, he's

historically been a bit of an

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inflation hawk, meaning that he has

a higher keener eye on, on inflation,

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but also he's a balance sheet hawk.

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He hates the size of

the Fed's balance sheet.

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And if his objective is to reduce

the size of the balance sheet,

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that's not helping monetary pay.

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: 00:00:38

That's a tightening of policy.

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Mm-hmm.

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And so someone has to buy

those treasuries is the point.

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So.

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: 00:00:44

I think that it's an interesting

pick from the standpoint that

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I think he's qualified for.

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Sure.

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: 00:00:49

Uh, I, I think he's a good pick, but

we'll have to see how, how he behaves.

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And I say that because when you

get into like the Trump orbit, you

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just, you can't extrapolate how

people have behaved in the past.

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: 00:01:00

Yeah.

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He tends to have this,

this power over people.

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So I think it'll be interesting to

watch his first press conference.

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: 00:01:07

I'm gonna go out on a limb here

and say it's not gonna go well.

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It's not gonna go well.

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'cause the reporters are armed to the

teeth and he's not used to that forum yet.

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Yeah.

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He'll get he'll, he'll,

he'll get into the job.

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But he's only one person.

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And I, I, that's what I want to come

back to is that so much is made of the

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Fed chairperson because we've kind of

made them these mythical creatures,

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you know, starting a Greenspan,

who's called the Maestro, right?

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Uh, everyone subsequent to Volker

has been in this kind of world of.

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Really getting the, the consensus, right.

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He's a, the, the chairperson is

a consensus builder, and what

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you have inside the Fed today

is a lot of divisive opinion.

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Mm-hmm.

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I would say there's probably

more hawkish behavior than

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there's more dovish behavior.

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You know, you have your Miron on

one side and you know you're gonna

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have GULs be on the other side.

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You're always gonna

have this kind of pool.

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But the thing is, is that.

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Even warsh himself can't

flip the vote right now.

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And so to me, that's what I

think the market's gonna watch.

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And I think with this

announcement, you see it out there.

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The markets have been well-behaved.

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: 00:02:05

It's not a bad pick, it's just

we don't know what it'll be.

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: 00:02:09

And remember we got him for a long time

now Once, once he gets confirmed, right?

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Yeah.

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And so this isn't just a Trump thing, it's

the next administration, the next as well.

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So I, I think it's a good pick.

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: 00:02:18

I just don't know what to,

what to make of it, because.

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Of the uncertainty around, I know

know the one criterion for the job

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was you have to lower interest rates.

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Yeah.

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But it flies right in the face

of unwinding the balance sheet.

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Right.

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But you could also argue that maybe

you do both and then we have a

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neutralist policy because of it.

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But then why are you doing it?

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You know?

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I don't know.

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Mm-hmm.

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: 00:02:38

So, um, I, I, my, my, my, my

verdict is, is yet to be rendered.

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And I'll watch him, uh, on the job.