The Candidates for the position of the Chairman of the Federal
Reserve Board of Governors
Trump Drags the Fed
Down into the Political Mud
Kevin Warsh – A Potentially Disastrous Choice
Ike Brannon notes:
“Recent reports suggest that the contest for the next
chair of the Federal Reserve is down to Jay Powell, a current member of the
Federal Reserve board, and Kevin Warsh, a member of the board from 2006 to
2011. And the rumor mill suggests that it is Warsh—a former Wall Street denizen
whose father-in-law Ronald Lauder is a good friend of Donald Trump—who is the
odds-on favorite.
Such a possibility is deeply unsettling: Selecting Warsh as chairman of the Federal Reserve Board could prove to be disastrous both to the economy as well as Trump’s chances for re-election. Put simply, Warsh has demonstrated a fundamental inability (or unwillingness) to understand precisely how monetary policy works in today’s economy, and that the rules we used in the past to gauge inflationary pressures simply do not work like they once did. Having him direct monetary policy would increase the risk and prolong the length of a future recession”.
Such a possibility is deeply unsettling: Selecting Warsh as chairman of the Federal Reserve Board could prove to be disastrous both to the economy as well as Trump’s chances for re-election. Put simply, Warsh has demonstrated a fundamental inability (or unwillingness) to understand precisely how monetary policy works in today’s economy, and that the rules we used in the past to gauge inflationary pressures simply do not work like they once did. Having him direct monetary policy would increase the risk and prolong the length of a future recession”.