Good looks says Trump, but what else?
On January 16, I noted The Decision to Replace Fed Chair Jerome Powell Is in Final Stretch
Trump was impressed by Warsh in an interview last month, telling associates over the holidays that he was struck by his acumen and good looks, according to people familiar with the matter.
Warsh has soared into the lead. He’s up from a 7 percent chance on December 3 to 44 percent now.
Hassett was once at 85 percent, now down to 36 percent.
Betters failed to note that Warsh is much better looking.
Warsh Wins
Truth Social: I am pleased to announce that I am nominating Kevin Warsh to be the CHAIRMAN OF THE BOARD OF GOVERNORS OF THE FEDERAL RESERVE SYSTEM. Kevin currently serves as the Shepard Family Distinguished Visiting Fellow in Economics at the Hoover Institution, and Lecturer at the Stanford Graduate School of Business. He is a Partner of Stanley Druckenmiller at Duquesne Family Office LLC. Kevin received his A.B. from Stanford University, and J.D. from Harvard Law School. He has conducted extensive research in the field of Economics and Finance. Kevin issued an Independent Report to the Bank of England proposing reforms in the conduct of Monetary Policy in the United Kingdom. Parliament adopted the Report’s recommendations. Kevin Warsh became the youngest Fed Governor, ever, at 35, and served as a Member of the Board of Governors of the Federal Reserve System from 2006 until 2011, as the Federal Reserve’s Representative to the Group of Twenty (G-20), and as the Board’s Emissary to the Emerging and Advanced Economies in Asia. In addition, he was Administrative Governor, managing and overseeing the Board’s operations, personnel, and financial performance. Prior to his appointment to the Board, from 2002 until 2006, Kevin served as Special Assistant to the President for Economic Policy, and Executive Secretary of the White House National Economic Council. Previously, Kevin was a member of the Mergers & Acquisitions Department at Morgan Stanley & Co., in New York, serving as Vice President and Executive Director. I have known Kevin for a long period of time, and have no doubt that he will go down as one of the GREAT Fed Chairmen, maybe the best. On top of everything else, he is “central casting,” and he will never let you down. Congratulations Kevin! PRESIDENT DONALD J. TRUMP
Trump Attacks Powell Again
Truth Social: Jerome “Too Late” Powell again refused to cut interest rates, even though he has absolutely no reason to keep them so high. He is hurting our Country, and its National Security. We should have a substantially lower rate now that even this moron admits inflation is no longer a problem or threat. He is costing America Hundreds of Billions of Dollar a year in totally unnecessary and uncalled for INTEREST EXPENSE. Because of the vast amounts of money flowing into our Country because of Tariffs, we should be paying the LOWEST INTEREST RATE OF ANY COUNTRY IN THE WORLD. Most of these countries are low interest rate paying cash machines, thought of as elegant, solid, and prime, only because the U.S.A. allows them to be. The Tariffs being charged to them, while bringing in $BILLIONS to us, still allows most of them to have a significant trade surplus, though much smaller, with our beautiful, formerly abused Country. In other words, I have been very nice, kind, and gentle to countries all over the World. With a mere flip of the pen, $BILLIONS more would come into the U.S.A., and these countries would have to go back to making money the old fashioned way, not on the back of America. I hope they all appreciate, although many don’t, what our great Country has done for them. The Fed should substantially lower interest rates, NOW! Tariffs have made America strong and powerful again, far stronger and more powerful than any other Nation. Commensurate with this strength, both financial and otherwise, WE SHOULD BE PAYING LOWER INTEREST RATES THAN ANY OTHER COUNTRY IN THE WORLD! Thank you for your attention to this matter. President DONALD J. TRUMP
Massive Ignorance by Trump
- Powell does not set rates. His vote is 1 of 12. And the vote was 10-2 in favor of holding rates steady.
- Tariffs are a tax on US citizens and business. Money does not flow in from foreign nations due to tariffs.
- It is idiotic for Trump to suggest he is kind to anyone but political hacks and criminals who donate to Trump.
- Tariffs do not and never have made any country powerful.
Is Warsh a Friend of Foe?
The Wall Street Journal reports Wall Street Can’t Decide Whether Kevin Warsh Will Be a Friend or Foe
Investors are optimistic that Warsh will preserve the Federal Reserve’s cherished independence. They are also concerned he might be far from the easy-money chair that President Trump has demanded, noting Warsh’s enthusiasm for reducing the central bank’s bondholdings.
The conflicting views were reflected Friday by falling stocks, steady bond yields, a rallying dollar and the worst day for gold and silver in more than four decades.
A Fed governor from 2006 to 2011, Warsh earned a reputation as an inflation hawk, having argued for years that low interest rates and expansive bond purchases would fuel rising prices.
More recently, he has said the Fed should cut interest rates faster. But he has also continued to argue that the central bank should shrink a balance sheet stuffed with U.S. Treasurys—a move that some investors believe could mitigate the impact of rate cuts.
Some leading investors cheered the pick. They say Warsh will likely prove more independent than other potential choices, and that investors will become more comfortable with the choice. Warsh’s background working with investor Stanley Druckenmiller is another reason to believe he might not prove hostile to markets, some say.
“Warsh is a pragmatist,” said Rob Arnott, founder of Research Affiliates. “He’ll be a voice of reason, and that will be calming and soothing to the markets.”
Hedge-fund manager Paul Tudor Jones praised Warsh as “very market savvy.”
“With debt/GDP over 100% and a budget deficit of 6%, he is the perfect person to navigate what will potentially be challenging times,” Jones said.
“People are responding to his comments that the balance sheet should be smaller,” said Priya Misra, a fixed-income portfolio manager at J.P. Morgan Asset Management. “That would have a really big impact on risk assets.”
Price moves were most dramatic in the market for metals, which have roared to all-time highs and traded like meme stocks in recent months. Gold futures fell 11%, their largest one-day decline since January 1980. Silver plunged 31% in its worst one-day loss since March 1980.
Some investors also noted that Warsh’s stated views wouldn’t necessarily translate to any near-term policy changes. While Fed chairs have historically wielded outsize influence at the central bank, they lack power to make policy on their own. The Fed, with the approval of Trump-appointed officials, just started expanding its balance sheet again by buying short-term Treasurys in an effort to relieve pressure in overnight lending markets.
Peter Boockvar, chief investment officer at OnePoint BFG Wealth Partners, said Warsh’s complicated history makes it hard to immediately discern his likely policies as Fed chair.
“Will the real Kevin Warsh please stand up?” he asked.
Trump Demanded a Fed Dove, But What Did He Get?
Bloomberg reports Trump Demanded a Fed Dove. He Picked a Hawk.
President Donald Trump turned the search for a new Federal Reserve chair into a game show. The winner is the most curious possible pick: Kevin Warsh. That choice is bound to add to market volatility and satisfy no one — probably not even the president.
Above all, the choice will be a source of tremendous cognitive dissonance across Wall Street and policy circles. While Trump pledged to pick a Fed chair who would usher in easier monetary policy, Warsh has been regarded as a hawk since his five-year stint as a Fed governor ended in 2011.
That profile will make it hard for Warsh to build credibility. If he lowers interest rates, markets will perceive him as a Trump lackey who has abandoned his principles.
It’s only since entering the conversation about the next Fed chair that he’s become a dove, and even now there’s some nuance to that statement: He has advocated for lower rates but also a substantially smaller balance sheet.
In this case, we already know that the real Kevin Warsh is rigidly hawkish. If we get any other version, it probably tells us he’s kowtowing to Trump. His personal proximity to the president, as the son-in-law of prominent Republican donor Ronald Lauder — the son of makeup scion Estee Lauder — won’t help with the optics either.
His candidacy also appears to have gotten a bump for the most superficial of reasons: his appearance. In the social media post announcing the decision, the president described him as “central casting.”
This isn’t a great look for the world’s most important central bank. Policymakers are navigating large risks to both the stable prices and maximum employment parts of their dual mandate. The path ahead is highly uncertain and will only be revealed by careful study of the incoming data — not dogma. And by picking Warsh for the job, Trump seems to have put himself and the American people in a hard-to-win situation.
Best of the Lot
Despite Warsh saying the things he needed to say to get selected, every one of Trump’s potential picks was doing that.
I believe Warsh is the best of the lot by far.
So, I think this was a good pick by Trump, and the only good pick of the top 5 candidates.
Trump wants someone he can control. I doubt Warsh is that person.
Even if Warsh bends somewhat to Trump, it will not be Warsh’s call alone.
Warsh’s Term
Kevin Warsh’s term as Federal Reserve Chair would begin in May 2026.
If confirmed by the Senate, he will take over when current Fed Chair Jerome Powell’s term expires in May 2026.
Powell has not stated whether or not he will stay on as Fed governor. Without strong conviction, I think he will linger, for a while.
The Next Fed Move
It’s possible the next move by the Fed is a rate hike, not a cut.
Although I expect more weakness in labor, I also expect more upside to inflation, especially as measured by the PCE.
The balance between those ideas will determine.
Please note The Fed Has Missed Its Inflation Target on Ten Different Measures
The Atlanta Fed tracks various inflation targets. Let’s have a look.
A falling dollar adds to inflation. So will rising crude prices, assuming I am right about oil prices having bottomed. Tariffs have not fully hit yet.
And unless I am crazy (maybe I am), health care and tax rebates are going to fuel inflation shortly.
I will discuss tax refunds next week.
So, let’s wait an see who is right about inflation, and jobs. Had the Fed cut, I think yields on the long end would have soared.
Powell thinks the Fed is in a good spot. I don’t. And whatever spit that is, Warsh will soon be in it.
Prediction: Trump will be more than a bit annoyed at Warsh, possibly as soon as this summer.
Related Posts
January 27, 2026: Trump Cheers a Plunge of the US Dollar “I Think It’s Great”
“Look at all the business we are doing,” says Trump.
January 30, 2026: PPI Producer Price Index Inflation Jumps 0.7 Percent Led by Services
Yesterday, Jerome Powell prematurely praised a decline in services inflation.
For a look at what health care will do to the PCE price index, please see Expect a Big Divergence This Year Between CPI and PCE Inflation
Rent and Healthcare go different ways in 2026. Plus there are huge timing issues.
Finally, believe labor market weakness is much more pronounced than most realize.
For discussion, please see Competing Claims, How Much Labor Market Weakness Is There?
Some see “No Signs of Labor Market Weakness”. Others strongly disagree.
Addendum – Another Idea
The single reason the Fed isn’t more dovish is the inability to pay interest on their existing debt, for the last 3 years.
A previous example of a Fed appointee that suddenly became a bird of a different feather once inside the organization. In 2009, Narayana Kocherlakota was appointed regional Minneapolis Fed President. A resolute hawk while at university, Kocherlakota underwent a dramatic and unexpected intellectual transformation from monetary hawk to dove after his appointment. Kocherlakota served one term. Kocherlakota was replaced by Neel Kashkari. Kashkari an unabashed liberal, that Senator Pat Toomey criticized as politically embracing social causes far outside of the Fed’s statutory mandate, when in 2017, Kashkari established the Fed’s Opportunity & Inclusive Growth Institute. The Fed’s DEI division, promoted continued low rates for the advancement of lower economic class minorities. The same economic sector most financially afflicted by the Fed’s low-rate engineered “K” economy.
I haven’t read the whole essay carefully, but this is the part that gets me.
I understand that tariffs create economic inefficiencies. But isn’t it true that if you have a large enough home market, you can use tariffs to protect home industry while you catch up with more advanced economies?
Wasn’t that what the American Civil War was really all about? Didn’t Japan do that all through the twentieth century? And didn’t China do it more recently? I understand that they stole technology at the same time.
I would really like an answer, because it bugs me that economists don’t seem to understand the military dimension in politics. They talk as if economic efficiency were all that there is.
Adam Smith wrote about trade. He didn’t mention, at least as far as I can recall, and bearing in mind that I haven’t read his “Theory of Moral Sentiments,” that there are two viable ways of getting what you want from other people apart from by honest exchange, and that they are force and fraud. Both of these are monopolies of government, which is simply successful organized crime.
Government farms out its use of force to soldiers, who are trained to fight soldiers of other countries, and bravos (police), who are trained to fight more-or-less helpless civilians. It farms out its fraud function to the media, the “educators,” and the courts. Is there anything I am getting wrong here?
Warsh is married to the daughter of Ronald Lauder, the cosmetics billionaire, and is a key figure behind Donald Trump’s obsession with Greenland.
I can answer this Mish! His name shows up in the Epstein files! That’s the only bar to get into this admin apparently.
If there are “vast amounts” of tariff revenues flowing into the country, then why doesn’t the president either lower tax rates substantially, or eliminate the IRS altogether? This would benefit the people and the country more than anything else.
He will do that,but just before the midterms.Be patient!
Dove or hawk doesn’t matter much. His main task will be to ensure that dollar and US economy and financial system survive next 3 three years of Trump’s spending spree and attacks on allies and everybody. Let’s not forget that dollar is not just the dollar circulating inside the US, it is also large overseas financial market. If something goes wrong with dollar …. And when looking at share of dollar in centarl banks’ financial reserves Warsh’s tenure doesn’t look like a cakewalk.
=Warsh
i would love to see someone asking him on confirmation in congress
have you ever fu11cked teenage on epstein island?
WE SHOULD BE PAYING LOWER INTEREST RATES THAN ANY OTHER COUNTRY IN THE WORLD!
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one thing i agree /w trump
USA is in worst eco-fin position in world. w/ 120% debt-gdp, and 2.5 tlrn deficit
and 1 trln trade deficit.
for example.
Germany debt ratio is less than 70%
Russia is less then 25%
=Warsh is an inflation hawk.
USA deficit is $2.3 trln.
LETS say warsh try to rein it,. force congress somehow cut $500 bill from spending, USA WILL BE IN INSTANT DEPRESSION.
alx
ps
btw, Warsh is pedo. was on Epstein island.
Diddling children to get the Fed Chair job. A new low in American “Exceptionalism”
You simply can’t advance in our political system unless somebody has pictures of you raping children to manipulate you with.
I’m sorry but you’re all acting stupid here. Talk of being a “sound money advocate” or “hawkish” when you are a FIAT CURRENCY FIEND like all Democrats and ALL Republicans as well, are, is utterly idiotic.
Where a PRIVATELY OWNED and CONTROLLED Fed/central bank has the monopoly of printing fiat currency, and LEGAL CONSTITUTIONAL MONEY gold and silver aren’t “legal tender”; claiming to be a sound money advocate amounts to lying and dissembling to absurd levels.
So stop this stupidity.
Until the Fed is dissolved and Constitutional money is reintroduced; there is no such thing as ‘sound money.’
I personally believe a dual monetary system where fiat and precious metals together are allowed to be used in parallel as (competing) legal forms of money, is best. This way, the market decides which is best in any given situation, and the arguing and figthing over monetary systems will be over FOR GOOD.
For all the hype Warsh is a Dove,as shown by his association and steps taken with Ben Bernanke in 2008.Gold , Silver,other Commodities will soar above the recent highs.
How big a percentage of your portfolio are you betting with Gold?
I have a combined 90% from 2004 onwards.
I hope Powell stays around after his time is up. Guess to 2028 or something.
Daily Mail:
Epstein’s sex empire was ‘KGB honeytrap’: Paedophile financier had multiple talks with Putin after conviction – with Russian girls flown in to harvest ‘kompromat’ on world-famous figures
https://www.dailymail.co.uk/news/article-15516349/Epsteins-sex-empire-KGB-honeytrap-Paedophile-financier-Putin-Russian-girls.html
I had a feeling Putin was behind it all along. Putin playing chess. KGB likely runs the world these days.
Putin got his Agent Krasnov placed upon the American throne.
I think Melania is actually a plant from the beginning too. She was one of girls Epstein trafficked.
I’d like to see her take the stand and send Cheesus to prison
There are reams of independent pieces of evidence that Epstein was Mossad. Not least that he said so and that 2 other former Mossad said so.
His emails are full of concern for manipulating all manner of things for Israel: So how do we get cyber weapons to Israel? How do we America to bomb Syria? How do get America to to bomb Iran?
Nothing in particular about Russian girls as such after the fall of the erstwhile USSR.Many among Epstein victims are from Eastern Europe.
As for espionage all countries misuse Honeytraps.
you know kgb ended in 1991???
anyway , take a pill and go sleeping
You know Putin was KGB?
You think everyone who worked there just disappeared?
You know Bush was CIA?
And…?
No, most of them accidentally self-defenestrate
Kevin Warsh will do whatever Trump wants him to do. Everyone will be shocked. I won’t be.
Stephen Miran wants a weak $.Trump’s economic policies to a certain extent are guided by Miran.
Should be some awkward questions during his senate hearing re. his name in the Epstein files.
You’re assuming someone has the moral fiber to ask the question
It’s very clear Warsh totally out ranks Trump in economic knowledge and intelligence. That’s a good thing. But will he use his power for Trump, the country, or himself. Hopefully he puts the country first and keeps a bag of pacifiers in his pocket for when he has to talk to Trump. Be nice if he could convince the politicians to do something about the damn nat’l debt…
Warsh assisted Ben Bernanke during the GFC in 2008.I have doubts about his knowledge especially after Trump chose him.
What do you want him to do about the debt?Stop the government spending?that would be recession and deflation.And deflation expands the value of the existing debt!Western countries are tricked !To find a way out you need to change the whole financial system.And blow out the fake wealth.
Trump doesn’t have the attention span to deal with the details, I think Bessent was instrumental in the appointment.
Trump likes the idea of being seen with younger people as he thinks it makes him look younger than standing next to Powell.
That reminds me, I’m convinced that Trump had the photograph staged at the Fed building worksite to make Powell look as small, dumb and incompetent as possible, as Trump stands above him pointing at blueprints.
Yeah younger as like 13 yr olds
Speaking of Trump, $Trump meme coin took a dive this past week. Currently at $4.24.
It’s been defying gravity the last couple months but has resumed its inevitable path to zero.
Never looked at it. Can you short it?
Trump was very clear that he would only appoint a sycophant (with good hair, it turns out). The question then is why is he so sure that Warsh is a true sycophant. I don’t know the answer.
Because he is an associate of Ben Bernanke especially during the 2008 GFC.Trump and Miran,want a weak $ and they will get it.
he might not get the seat due to his epstein ties. i don’t think friday plunge in paper metals was about him at all. seems like the chinese froze out a fund over there. plus the metals delivery problems at comex. imho. he’ll play ball for trump. he’s no tall paul volcker. carter picked him and volcker destroyed carters hopes of a second term. we shall see. raising rates will crush r/e which is much more important to the economy versus stocks. imho. of course i will repeat the FED has only one real mandate. that is to keep the owners of the NYFED, in high cotton. that being the NYC major banks. all the rest of it is really eyewash. imho.
Trump seems powerful to have his men as of now.One has to watch the results of the Epstein Files on him and many others,though.
=he might not get the seat due to his epstein ties.
that occured to me too. due new facts!
WE WILL SEE, if he is not nominated/confirmed me11ans shit is real!
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I WOULD LOVE TO SEE SOMEONE ASKING HIM ON CONFIRMATION IN CONGRESS
HAVE YOU EVER FU11CKED TEENAGE ON Epstein ISLAND?
Warsh gives hope the Central Bank will reduce its QE market interference. But who knows where things are headed and what policies he will actually push.
The economy is sending mixed signals. Inflation is destroying savings. But consumers in aggregate keep spending! GDP computes as a large number but too many localities show stagnation or decline.
Trump is all about HIS politics so my guess is Trump wants to be seen as arguing on behalf of more punch bowl so that he can say he wanted good things for Americans. Reality is going to make that a tough sell. Either stagflation persists or the economic recessionary reset becomes the dominant theme.
Something has to give and Trump’s priority is having someone to blame.
I doubt whether there will be any reduction in QE as he was associated with QE King Bernanke in 2008.
=But consumers in aggregate keep spending!
BS! printers keep printing!
Probably the least worse of the four candidates. However, taco will fire him if he doesn’t do what he is told.
I think Trump has chosen Powell as his scapegoat, but the list of who to blame will get longer!
It is not the candidate or person but the state of US economy, its Debt and Deficits. Without Wars and intimidations for investments in US, nobody can change the present state of US economically and financially. And US has an Infrastructure and Power problem.
From a Brookings Institute article:
“By convention, the FOMC elects the Board Chair as its own Chair and the New York Fed president as its Vice Chair, but nothing in the statute makes either of these a requirement.”
Quite frankly, I think Trump chose Warsh to avoid the potential utter humiliation of Powell not leaving, and then having the Fed override Trump’s pick, and re-elect Powell as FOMC chair. Warsh is the only one with the Bona Fides to definitely unseat Powell, *and* dominate Powell’s influence even if Powell stays. In other words, I believe Trump’s pick is 100% personal, sort of like his decision to run for president just so he could “crush” Obama.
Present state of US requires Wars .Persons don’t matter now.
“What Did He Get With Kevin Warsh” ?
Most likely someone who is more likely to respond to Wall Street and its needs than the whims of POTUS.