He’s young, he’s Republican and he was seen a key steward of the Federal Reserve’s financial crisis, Chairman Ben Bernanke’s right-hand man.
It’s only natural that the name of Kevin Warsh, ex-Fed governor and now a fellow at the Hoover Institution, would come up as a potential replacement to Janet Yellen, whose term expires at the end of January 2018.
During the campaign, Trump was not shy about attacking Yellen’s motivations in an unusual breach of central bank independence, accusing the current chair of keeping interest rates low to help bolster the economy under Democratic President Barack Obama.
“The Fed is obviously not independent. It’s obviously not even close to being independent,” he said. “Watch what’s going to happen afterwards — it’s a very serious problem.”
Warsh, a former Morgan Stanley banker, currently “advises several private and public companies, including service on the board of directors of UPS,” his profile says.
During that period, his hawkish desire to raise interest rates proved premature and erroneous, future economic conditions would show.
That’s why Tim Duy, avid Fed watcher and economics professor at the University of Oregon, was baffled by Warsh’s opinion piece, offering an extensive critique here.
Perhaps Duy is missing the bigger picture. Maybe the opinion piece was Warsh’s way of throwing his hat in the ring for a Fed chairmanship in 2018.
This is an opinion column. The thoughts expressed are those of the author.