New Fed Chair Announcement

If officially announced later today, President Trump’s apparent pick of Kevin Warsh for the next Fed Chair would arguably be one of the better outcomes for investors compared to the other contenders that had been in the running. Warsh’s long-running hawkish views should help to counteract concerns that he might morph into a full-blown Trump stooge. That said, his firm conviction that both AI and the Trump administration’s regulatory push will help to hold down inflation, as well as his long-standing view that the Fed should operate with a much smaller balance sheet, present the risk of some upward pressure on long-term bond yields.