Trump's Fed-Chair Pick Is an Interest-Rate Hawk-Or Is He?

"Trump has not been shy about what he wants in a Fed chair: someone who will lower interest rates. He has constantly attacked current Fed Chair Jerome Powell for not slashing rates fast enough, to the point of launching an obviously spurious criminal investigation into him. Powell has stood firm, but his term as chair expires in May. This gives Trump the chance to install someone who will do what he wants."

"That someone was long expected to be Kevin Hassett, the head of Trump's National Economic Council. Hassett, who was once a widely respected conservative economist, has in recent years taken a sharp turn into Trumpist propaganda. A Hassett chairmanship therefore augured reckless rate cuts that could trigger a fresh bout of dangerous inflation. This spooked Wall Street. Major bond investors met with the administration to tell them how worried they were."

"Unlike some of the other contenders for the job, Warsh does not have a track record as an avowed Trump loyalist. For that reason, the response to his nomination from mainstream figures has been mostly positive. "Kevin Warsh is well above the bar on both substance and independence to be Chair of the Federal Reserve," Jason Furman, who served as the chair of Barack Obama's Council of Economic Advisers, posted on X."

Kevin Warsh, a former Wall Street banker and former Federal Reserve governor, was nominated to lead the Federal Reserve. Warsh lacks a record as an avowed Trump loyalist, producing generally positive reactions from mainstream figures. The nomination occurs amid sustained pressure from the president for lower interest rates and attacks on current Chair Jerome Powell, whose term expires in May. Kevin Hassett had been a leading expected contender but his recent turn toward Trumpist positions alarmed investors and raised fears of reckless rate cuts and renewed inflation. Major bond investors expressed worry and political scrutiny followed Powell's treatment.

Read at The Atlantic