The knee-jerk reaction to Donald Trump’s pick of Kevin Warsh to replace Jerome Powell as chairman of the Federal Reserve is that the president made the most hawkish selection among the four reported finalists for the job.

In the wake of last night’s leak that Warsh was to be the choice, risk markets — crypto among them — fell sharply, with bitcoin plunging all the way back to $81,000.

"The branding of Kevin as someone who’s always hawkish is not correct,” Stanley Druckenmiller told the FT on Friday. "I’ve seen him go both ways."

Druckenmiller — who made billions working alongside George Soros at Quantum Fund and with his own family office, Duquesne Capital Management — is surely in a position to know. Warsh has been a partner at Duquesne since 2011.

The relationship between them has previously been described as close to father-son, with the two speaking and/or texting more than a dozen times per day.

"I could not think of a single other individual on the planet better equipped," Druckenmiller continued.

Where does Treasury Secretary Scott Bessent fit in?

Druckenmiller also has very close ties to Scott Bessent. It was Druckenmiller who hired Bessent at Quantum Fund more than 30 years ago, where the to-be U.S. Treasury Secretary made his own billions.

"The pair [Bessent and Warsh] embody the way Druckenmiller interprets markets and economic policy," wrote the FT in a profile roughly one year ago.

“I’m really excited about the partnership between [Warsh] and Bessent,” Druckenmiller said today. “Having an accord between the Treasury secretary and Fed chair is ideal.”