Asks for Dutta's feelings about the Fed chair nomination prospect.
John
Neil Dutta
President picked the worst candidate (Kevin Warsh) from available choices.
Questions confidence that Warsh's recent dovish rhetoric will hold during his tenure and convince the FOMC.
Anmarie
Neil Dutta
Convincing Trump is different from convincing the FOMC. Criticizes Warsh's horrific financial crisis record of worrying about inflation while unemployment rose.
Neil Dutta
Warsh criticizes Fed for encouraging fiscal irresponsibility through low rates, but Dutta argues causality is backwards - rates were low because the economy was weak.
Asks if Warsh nomination makes Powell more likely to stay on as governor.
Anmarie
Neil Dutta
Yes, nothing about this process has been normal. Warsh has been hawkish his entire career and is not known for good economic calls.
Asks for market advice for clients based on this analysis.
John
Neil Dutta
Don't dump all stocks and punt the long end of Treasuries right away - it takes time for these things to show up.
Notes Warsh convinced Trump in Oval Office, asks about Congressional process and market pushback.
Anmarie
Neil Dutta
There's time for pushback from Trump's base since Warsh is not MAGA and works at establishment GOP think tank.
Asks if Trump would be better off sticking with Powell-type given Warsh's body of work.
Anmarie
Neil Dutta
Better candidate would have been Christopher Waller who has track record of convincing colleagues to dovish position while reforming institution.
Asks who Trump blames if nomination doesn't go well.
John
Neil Dutta
Trump himself - Fed job under Trump is thankless. Warsh was least favorite of candidates being considered.