{"id":70376,"date":"2026-02-02T14:16:33","date_gmt":"2026-02-02T14:16:33","guid":{"rendered":"https:\/\/dogewisperer.com\/?p=70376"},"modified":"2026-02-02T14:16:33","modified_gmt":"2026-02-02T14:16:33","slug":"5-things-kevin-warsh-could-change-at-the-fed-and-why-markets-are-nervous","status":"publish","type":"post","link":"https:\/\/dogewisperer.com\/?p=70376","title":{"rendered":"5 Things Kevin Warsh Could Change At The Fed \u2014 And Why Markets Are Nervous"},"content":{"rendered":"
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President Donald Trump<\/strong>‘s nomination of Kevin Warsh<\/strong> to succeed Jerome Powell<\/strong> as Chair of the Federal Reserve is already rippling through markets. <\/a><\/p>\n

On Friday, U.S. stocks\u2014tracked by the SPDR S&P 500 ETF<\/strong> (NYSE:<\/a>SPY<\/a>)\u2014closed lower, the dollar strengthened, precious metals suffered a historic selloff, and crypto assets extended losses into the weekend\u2014an early signal that investors are bracing for a potentially dramatic shift in how the Fed approaches growth, inflation, and its role in the economy.<\/p>\n

1. Inflation Is \u2018A Choice,\u2019 Not a Trade-Off<\/strong><\/h2>\n

Warsh rejects one of the Fed’s most entrenched ideas: that low unemployment mechanically leads to inflation.<\/p>\n

On Monday, veteran strategist Ed Yardeni<\/strong> wrote that Warsh views inflation as “a byproduct of unsound policy decisions,” not the inevitable result of economic strength. <\/p>\n

Warsh explicitly rejects the Phillips Curve framework, which still underpins much of the Fed’s modeling.<\/p>\n

“Warsh frequently slams the Fed for being \u2018stuck with models from 1978,’ referring to the traditionally relied upon Phillips Curve model,” Yardeni said. <\/p>\n

For markets, this raises a key concern: if the Fed stops tightening policy in response to strong labor data, will inflation expectations remain anchored?<\/p>\n

2. Lower Rates\u2014But Only With a Smaller Fed Balance Sheet<\/h2>\n

From a market perspective, this is where Warsh’s thinking becomes most complicated. <\/p>\n

David Mericle<\/strong>, economist at Goldman Sachs<\/strong> highlights that Warsh has consistently argued that interest rate cuts should be paired with balance sheet reduction, so the two policies offset each other’s impact on financial conditions.<\/p>\n

Mericle points out that this view differs materially from current Fed thinking. <\/p>\n

Warsh believes the Fed’s asset holdings have played a “material part of …<\/p>\n

Full story available on Benzinga.com<\/a><\/p>\n<\/div>\n","protected":false},"excerpt":{"rendered":"

President Donald Trump‘s nomination of Kevin Warsh to succeed Jerome Powell as Chair of the Federal Reserve is already rippling through markets. On Friday, U.S. stocks\u2014tracked by the SPDR S&P 500 ETF (NYSE:SPY)\u2014closed lower, the dollar strengthened, precious metals suffered a historic selloff, and crypto assets extended losses into the weekend\u2014an early signal that investors […]<\/p>\n","protected":false},"author":1,"featured_media":0,"comment_status":"closed","ping_status":"closed","sticky":false,"template":"","format":"standard","meta":{"iawp_total_views":0,"footnotes":""},"categories":[2],"tags":[3,4,5],"class_list":["post-70376","post","type-post","status-publish","format-standard","hentry","category-news","tag-crypto","tag-doge","tag-news"],"_links":{"self":[{"href":"https:\/\/dogewisperer.com\/index.php?rest_route=\/wp\/v2\/posts\/70376","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/dogewisperer.com\/index.php?rest_route=\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/dogewisperer.com\/index.php?rest_route=\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/dogewisperer.com\/index.php?rest_route=\/wp\/v2\/users\/1"}],"replies":[{"embeddable":true,"href":"https:\/\/dogewisperer.com\/index.php?rest_route=%2Fwp%2Fv2%2Fcomments&post=70376"}],"version-history":[{"count":0,"href":"https:\/\/dogewisperer.com\/index.php?rest_route=\/wp\/v2\/posts\/70376\/revisions"}],"wp:attachment":[{"href":"https:\/\/dogewisperer.com\/index.php?rest_route=%2Fwp%2Fv2%2Fmedia&parent=70376"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/dogewisperer.com\/index.php?rest_route=%2Fwp%2Fv2%2Fcategories&post=70376"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/dogewisperer.com\/index.php?rest_route=%2Fwp%2Fv2%2Ftags&post=70376"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}