Introduces Warren Pies' criticism of Kevin Warsh as Fed pick and asks for his reasoning.
speaker1
Warren Pies
Warsh works at cross purposes with Trump's goal of lower rates and hurts Fed independence due to his track record of being wrong, usually hawkish.
Warren Pies
Warsh will have difficulty building consensus for rate cuts due to skeptical view of his track record.
Warren Pies
Market sees Warsh's balance sheet rhetoric as lowering the Fed put, making Fed intervention harder in a crisis.
Warren Pies
Conclusion: Warsh pick means higher rates, less credibility, and lower Fed put.
Clarifies that 'higher rates' means steeper yield curve with emphasis on long end.
speaker1
Warren Pies
Confirms steeper curve view: as trust goes down, term premium goes up, yield curve steepens.