Kevin Warsh Whispered To Be Frontrunner For Trump Treasury Secretary
Warsh has been called a "hard money hawk" by Larry Kudlow
There are multiple reports out this morning that Kevin Warsh is now the frontrunner to be Secretary of the Treasury under President-elect Trump.
Who is Kevin Warsh?
Kevin Warsh is a former U.S. Federal Reserve Governor (2006-2011), who was appointed by President George W. Bush.
Career Highlights:
Federal Reserve Board (2006–2011): Warsh was appointed as a Federal Reserve Governor by President George W. Bush. He was one of the youngest appointees in the history of the Fed and played a significant role during the 2008 financial crisis. He worked closely with then-Chairman Ben Bernanke on measures to stabilize the financial system.
Focus at the Fed: His tenure emphasized financial markets, monetary policy, and international financial issues. Warsh supported unconventional monetary policies such as quantitative easing during the crisis, although he later expressed concerns about the potential long-term risks.
Post-Fed Career: After leaving the Fed, Warsh has been affiliated with Stanford University's Hoover Institution, where he is a Distinguished Visiting Fellow. He has also worked in private equity, advising various firms.
Advisor and Consultant: Warsh has advised on economic and financial matters for institutions like the Bank of England and private corporations.
Education:
Bachelor's Degree: Stanford University, with a major in public policy.
Juris Doctor (JD): Harvard Law School.
Notable Characteristics:
Warsh is known for his expertise in financial markets and monetary policy.
He has often critiqued the Fed’s post-crisis policies, advocating for a more cautious approach to low interest rates and balance sheet expansion.
Warsh has been considered for high-level economic roles, including Federal Reserve Chair, particularly under Republican administrations.
Warsh recently appeared on CNBC and delivered an interesting criticism of the Federal Reserve under Chairman Powell:
"The power of the Federal Reserve comes from its credibility." ~ Kevin Warsh
Legally, Powell cannot be replaced as Fed Chair until his term expires in Summer 2026. However, the Treasury has an important role in shaping financial conditions in how it chooses to finance the US Federal Government. In addition, the Treasury works with the Federal Reserve to ensure the smooth functioning of financial markets. For instance, during periods of financial stress, the Fed may buy Treasury securities (quantitative easing) to lower yields and provide liquidity.
Trump loves to troll. Appointing Warsh as Treasury Secretary would be a great troll of Fed Chair Powell. However, I must also emphasize that Warsh is a Wall Street asset who played an instrumental role in helping Wall Street banks navigate the Global Financial Crisis (2007-2009).
Warsh currently serves on the Board of Directors for global shipping giant UPS (NYSE:UPS). He lives in New York City with his wife Jane Lauder, a granddaughter and heiress of Estée Lauder and long-time employee of the family business, the Estée Lauder company.
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