Trump has, at last, revealed his pick to become the next Chairman of the Fed, but his decision might contradict the objective of lowering interest rates.
On Truth Social, President Trump revealed that he would nominate Kevin Warsh, a partner at Drunkenmiller’s Duquesne, as the next Fed Chairman. Warsh, who became the youngest Fed governor ever at 35, served on the Fed’s board from 2006 to 2011.
He declared:
“I have known Kevin for a long period of time, and have no doubt that he will go down as one of the GREAT Fed Chairmen, maybe the best. On top of everything else, he is ‘central casting,’ and he will never let you down.”
Trump has repeatedly criticized Jerome Powell, the current chairman, for being ‘too late’ at lowering interest rates, an issue that has been souring the relationship between the two for some time. Warsh, a Stanford and Harvard graduate, is expected to enact Trump’s low-interest policies, but some analysts believe he might have been duped.
Warch is described as hawkish, often worrying about the effects of interest rates on inflationary processes, much like Powell. While he has been friendly toward cryptocurrency and bitcoin, referring to it as “cool software,” he also proposed creating a dollar central bank digital currency ( CBDC) for wholesale payments in a 2018 article, causing mixed reactions in the crypto community.
At the same time, he has been wary of the value of private cryptocurrencies, including stablecoins, signaling that they could become unstable in stressful times.
Warsh has also been critical of the Federal Reserve and is expected to run a tight ship, reducing liquidity, which would be a brake for risk assets, such as bitcoin and cryptocurrencies, adding to the current market negativity.
Read more: Deleveraging Disaster: $1.7 Billion Liquidated as Bitcoin Slips to $81,900
Who has President Trump nominated as the next Chairman of the Federal Reserve?
Trump has nominated Kevin Warsh, a former Fed governor and partner at Duquesne, for the chairman position.What experience does Kevin Warsh bring to the role?
Warsh served on the Fed’s board from 2006 to 2011 and became the youngest governor in history at age 35.What are Warsh’s views on interest rates and inflation?
Although expected to support lower interest rates, Warsh is viewed as hawkish, often concerned about inflation’s impact on rate policy.How does Warsh’s nomination affect the cryptocurrency market?
He has expressed a cautious stance on cryptocurrencies and stablecoins, which could dampen risk assets like bitcoin during his tenure.
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