Episode summary
Lots More With Skanda Amarnath on the Risks of Kevin Warsh | Odd Lots
Odd Lots
· · 26 min · Hosts: Joe Weisenthal, Tracy Alloway · Guests: Skanda Amarnath
Summary
Skanda Amarnath argues that Kevin Warsh’s Fed nomination is controversial not because he is unknown, but because his record suggests a pattern of getting major macro calls wrong and tailoring policy views to politics. He says Warsh was too sanguine about the financial system in 2007-08, then overstated inflation risks and opposed QE even as unemployment remained high after the crisis.
Amarnath also says Warsh’s views have shifted in ways that track partisan control: hawkish when Democrats were in power, more dovish after Trump’s return. That pattern, he argues, raises questions about whether Warsh is trying to read the economy or satisfy presidential preferences, especially after his comments about the Fed needing “regime change” and “breaking some heads.”
The bigger concern, Amarnath says, is credibility inside the FOMC and during the next crisis. A Fed chair needs to persuade governors and regional presidents using data and a reputation for independence; Warsh’s history of going off-script, attacking the balance sheet, and aligning with Trump could make that harder just when the Fed may need broad support most.
Key takeaways
- Amarnath says Warsh missed the buildup to the 2008 crisis and then overstated inflation risks while unemployment was still high.
- He argues Warsh’s policy views have repeatedly moved with partisan control, which could weaken his credibility as Fed chair.
- Amarnath says the Fed needs a chair who can persuade the FOMC with data, not one who sounds like he is serving presidential preferences.
- He thinks Warsh’s long critique of QE and the balance sheet is at odds with current money-market conditions.
- Amarnath warns that a future crisis could be harder to manage if the Fed cannot rally support from both Congress and the White House.
Notable quotes
“what you will find is this is someone who was very eager to tout the financial system was performing even as it was descending into crisis in 2007 and 8”
“He basically said this was not really a big problem, not something the Fed should be focused on”
“there's a tendency if you look through his track record of basically worrying about inflation and worrying about sort of fiscal excesses is during periods when it's a Democrat that that's in the White House”
“I think what you actually hear from Kevin War on the data dependent side is pretty worrisome because it kind of speaks to a a disinterest in in being perceived as objective”
How the episode opens
Bloomberg Audio Studios, podcasts, radio, news. — Oh, Joe, this is cutting. This is from Neil Dada, friend of the pod. — Oh, yeah. All right. Read it out. Read it out. — President Trump has picked everyone's least favorite candidate, Kevin Walsh, for the next Fed Reserve chief. I tip my hat to Walsh, who has managed to get selected after being passed over time and again. That's a remarkable achievement for him.
Joe, I want a t-shirt that says ruthless utility maximizer. — Black gold. — Let's talk about losers. — Who cares? — I've decided I'm going to base my entire personality going forward on campaigning for a strategic pork reserve in the US. — Skulls Unlimited.
Ooh, what's the ticker for that? — No, I think that like in a couple years the AI will do a really good job of making the Odd Outlaws podcast. — How do I get more popular and successful? One day that person will have the mandate of heaven. We do have
The perfect guest. — You're listening to Lots More where we catch up with friends about what's going on right now — Because even when Odd Lots is over, there's always lots more
And we really do have the perfect guest. I'm just going to say what I find interesting right now is that you know like Trump announces someone and you expect a bunch of like liberal ninnies in the media to like shake their fists. It's like oh this isn't good.
You know it's like there's a lot of predictable response. But it is interesting to my mind to hear someone like Neil who is uh I do not associate him with liberal media group think or anything like that as well as many others uh who are like huh interesting pick here.
From the episode’s captions: roughly the first two minutes, lightly cleaned. Keep watching on YouTube →
Topics
- kevin warsh fed nomination
- fomc credibility
- monetary policy risks
- gfc policy mistakes
- partisan alignment
Companies and tickers mentioned
- Employ America
Watch the episode
Watch “Lots More With Skanda Amarnath on the Risks of Kevin Warsh | Odd Lots” on YouTube
Summary, takeaways and quote selection by Octagon. Quotes are short excerpts; the full conversation is in the episode.
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