'Not the kind of person who gives up': what analysts are saying about the candidate to head the Fed

Kevin Warsh, nominated by Donald Trump for the post of Fed chairman, may increase the level of market confidence in the US financial system, analysts believe. During his tenure at the Fed from 2006-2011, he earned a reputation as a supporter of tight monetary policy, although he has recently advocated lower rates, which is in line with Trump's position. The dollar reacted to his nomination by strengthening and the precious metals market, seen as protective assets, by falling sharply. What is being said about Warsh on Wall Street?

- "Worsh's nomination should help stabilize the dollar somewhat and reduce the risk of it weakening by challenging currency-depreciation trades - which is why gold and silver have fallen sharply in price," explains Krishna Guha, head of central bank strategy at Evercore ISI, whose commentary is cited by Bloomberg.

- "I think the market will appreciate his candidacy because he's a strong-willed person - not the kind of person who tends to give up. He's definitely had a tough policy over the years at the Fed," notes Tony Farren, managing director of Mischler Financial Group. According to him, the strengthening dollar shows that Warsh is respected by investors.

- "Warsh is a good choice to boost confidence in the Fed," notes BMO Capital Markets strategist Ian Lingen. He says investors believe Warsh is less likely to use the Fed's balance sheet to influence long-term Treasury yields.

- The market will have a hard time predicting Warsh's actions on the Fed Funds rate, warned analysts at TD Securities in a note quoted by Marketwatch. "This is due to a marked shift in his policy priorities after a decade of extremely hard-line stances," they wrote. - We believe Warsh is likely to be a proponent of a rate cut in 2026. But the big question is whether he will return to his previous hard-line stance in the future."

- Kevin Warsh is not a staunch advocate of tight monetary policy, despite his reputation as a conservative on interest rates," Warsh's longtime mentor, billionaire Stanley Druckenmiller, told the Financial Times. The Fed chief candidate has been a partner in the Druckenmiller family office since 2011. "I've seen him change his position both ways," the billionaire said, but added. - I can't think of a single person better qualified for the role."

- "It's hard for me to imagine Trump would appoint someone who wouldn't commit to gradually lowering rates starting in June. But I think it takes time and data for any unambiguous long-term market reactions," said TJM Institutional Services strategist David Robin, whose commentary was cited by Bloomberg.

Trump's nominee to head the Fed still needs to be confirmed by the Senate. If confirmed, Warsh will succeed Jerome Powell, whose tenure as Fed chief will end in May.

This article was AI-translated and verified by a human editor