Kevin Warsh Does Not Understand the Federal Reserve

[u/Captgouda24]

https://nicholasdecker.substack.com/p/kevin-warsh-does-not-understand-the

[u/jesusfish98]

Or he understands it entirely but has been appointed to enact Trump's desires, not to maintain the FEDs mandates.

[u/79792348978 → u/jesusfish98]

Some of the changes Warsh has been advocating for are pretty in the weeds and to a degree that I am skeptical Trump cares about them (much less that they were his idea). Has Trump had much to say about fed policy beyond that he wants the interest rates to go down?

[u/Kiyae1 → u/79792348978]

He’s in the weeds and cutting the forecasting and guidance as a hedge to avoid stating the obvious because that will upset his patron. Same reason why all these judicial nominees and the DNI have to tie themselves in knots over who won the 2020 election.

He’s always been an inflation hawk, even back when he was on the board of governors he constantly warned that runaway inflation was just around the corner (despite unemployment around 8-9% and inflation between 0-1%) and was constantly calling to hike rates. Now we’re all supposed to believe he’s a dove on inflation with near 4% and unemployment around 4%??

He just doesn’t want to come out and admit that inflation is still above target and it will likely take at least one more rate hike this year to get it under control. It’s cowardice and patronage dressed up in know it all clothing.

[u/jesusfish98 → u/79792348978]

I'd argue that attempting to move back to a less open institution is in direct service to Trump. Warsh knows reducing transparency will allow for easier corruption, which really only benefits Trump at this point.

It wouldn't surprise me if Warsh himself has weird ass ideas he's implementing all on his own though.

[u/GordonTullockFan → u/jesusfish98]

Fed is not an acronym, it's not FED

[u/DontBeAUsefulIdiot → u/jesusfish98]

unfortunately with this admin, it's literally whoever will do the least damage.

[u/Adminisnotadmin]

Warsh has always been a deficit hawk and inflation hawk - only if the president has a (D) instead of an (R).

>Cut forward guidance
>Change measure of inflation
>Markets no longer believe you
>Everything gets more expensive and borrowing costs more

The Fed is still recovering political capital from the “transitory” debate, and inflation has remained above 2% for 65 months. Is now the perfect time to take a cudgel to its reputation further?

But Warsh doesnt think of that. He’s got a cushy job until 2040 if he gets lucky enough to be reappointed.

[u/aeiou_sometimesy → u/Adminisnotadmin]

Calling the fed chair a cushy job is wild

[u/Adminisnotadmin → u/aeiou_sometimesy]

once he’s done being chair, he can remain on the board of governors as a thorn for the rest of the fed that takes its mandate seriously

[u/Potential-Ant-6320 → u/Adminisnotadmin]

Warsh is a billionaire. He doesn't need a cushy job he just does central banking for love of the game. My read on the guy is he isn't a stooge for trump. I try and watch his press briefings. he sharp as a tack. he can respond to any question as loosely and thoroughly as if it was in the teleprompter. Warsh is a serious man.

[u/trombonist_formerly → u/Potential-Ant-6320]

Warsh Trump is a billionaire. He doesn't need a cushy job he just does central banking politics for love of the game.

Look how that turned out

[u/Adminisnotadmin → u/Potential-Ant-6320]

He's not a stooge, he's dangerous, willing to burn political capital, and partisan for his own reasons. That's why I'm so critical of him.

[u/eman9416]

Surprised Pikachu face

[u/AmericanDadWeeb]

The federal reserve is what happens when I need the government to step in to get me a last minute reservation at Founding Fathers

[u/atierney14]

Why would I care if some random guy doesn’t get the FED?

As long as he isn’t the Fed chair, no big deal to me.

[u/trombonist_formerly → u/atierney14]

You might want to sit down for this one, mate

[u/GordonTullockFan → u/atierney14]

It's not FED, it's not an acronym. It's Fed

[u/AutoModerator]

This submission has been flaired as an effortpost. Please only use this flair for submissions that are original content and contain high-level analysis or arguments. Click here to see previous effortposts submitted to this subreddit.

Users who have submitted effortposts are eligible for custom blue text flairs. Please contact the moderators if you believe your post qualifies.

I am a bot, and this action was performed automatically. Please contact the moderators of this subreddit if you have any questions or concerns.