Fed Chair Kevin Warsh Faces Challenging Debut

Introduces Ira Jersey and asks about expectations for Kevin Warsh's first FOMC meeting, noting it's a 'no-win situation'.

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Speaker2

Warsh is in a no-win situation because he cannot single-handedly lower rates as Trump wants; he's only one FOMC member. Key to watch: his relationship with other members and his outlook on rates. A conclusion to the Iran war could reduce oil prices and lower the chance of a rate hike later this year.

The market has already priced in some of this oil price reduction on Friday. Also watch for any changes to Fed communications policy, which Warsh has previously mentioned wanting to reform.

Asks how the committee will think through recent data (jobs, inflation) with a new chair trying to assert control.

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The Fed has three camps: hawks (like Logan) who may want to hike if inflation/jobs stay strong; those worried higher energy prices will slow consumption and create stagflation; and a middle group. Warsh is neutral/middle-of-the-road. He will likely try to move hawks toward neutrality. Without political pressure, he'd probably advocate for holding steady until clarity on inflation and jobs emerges.

The job market is concentrated in only two sectors, not broadly strong. The ECB raised rates but has a single mandate; the Fed has a dual mandate (jobs + inflation), so it can afford to wait.

Notes that Warsh's views are not well-known; his testimony lacked detail. Asks how critical his first press conference will be for gauging direction.

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Warsh must express both the committee's consensus and his personal view. He wants less Fed communication (chair speaks for all, fewer speeches). This will be hard to enforce. He may revert to quarterly-only press conferences. The SEP will be released; Warsh may or may not post his own dot.

There is precedent for FOMC members not posting their rate expectations. The market wants more communication, making it difficult for Warsh to reduce it.

Shifts topic to the World Cup, noting ticketing issues and unsold seats.

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Asks if Jersey is attending the World Cup.

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Is attending at least one match. Criticizes FIFA's ticketing: poor execution, profit-maximizing, pricing out fans from poorer countries. Suggests smaller venues for smaller teams.

Owns a minor league soccer team. Atmosphere has been good but could be better with better planning.

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