Episode summary
Why Markets Aren’t Scared of Kevin Warsh | Prof G Markets
Prof G Markets
· · 27 min · Hosts: Ed Elson, Scott Galloway · Guests: Mark Zandi, Rich Greenfield
Summary
Markets took Trump’s nomination of Kevin Warsh for Fed chair largely in stride. The host said the dollar strengthened, stocks fell, and gold and silver eased, but Mark Zandi argued the reaction was modest and that Warsh looks like a “reasonably good choice” with real Fed experience, Wall Street credentials, and enough independence to be a credible central banker. Zandi also said Warsh is only one vote on a 12-member committee, so near-term rate decisions should still be driven more by the economy than politics.
Zandi expects the confirmation fight to matter more than the nomination itself, with some Senate Republicans signaling resistance until the DOJ investigation into Jerome Powell is resolved. Even so, he thinks the White House will eventually pivot and move on, because it is not a winning strategy. On Powell, Zandi argued his legacy should be strong: he guided the economy through the pandemic, kept employment near full employment, and brought inflation close to target except for tariff effects.
The Disney segment focused on a stock drop despite an earnings beat. Rich Greenfield said investors are worried about a weak fiscal Q2, flat-to-down theme-park attendance, and Bob Iger leaving earlier than expected. He argued the most likely successor is Josh D’Amaro, and that a new CEO could push Disney toward a breakup that leaves theme parks, studios, and streaming together while spinning off ESPN, ABC, and other linear TV assets. The episode ended by arguing gold and silver are starting to trade like meme stocks, driven by retail speculation and app-driven buying rather than fundamentals.
Key takeaways
- Zandi said Kevin Warsh is a credible Fed pick, but as one vote on the FOMC he is unlikely to dictate near-term rate cuts on his own.
- The host said market reaction to Warsh was muted, with only a small move in Treasury yields and a modest risk-off reaction in stocks and metals.
- Zandi thinks Senate confirmation could be delayed, but the White House will likely pivot away from the DOJ fight because it is not a winning strategy.
- Greenfield said Disney’s stock drop reflected worries about weak fiscal Q2 trends, especially flat-to-down theme park attendance and heavier back-half weighting.
- Greenfield expects Josh D’Amaro to be the leading Bob Iger successor and sees a plausible future Disney breakup that separates linear TV from parks, studio, and streaming.
- The host argued gold and silver now resemble meme stocks because retail flows and app recommendations may be driving the trade as much as macro fundamentals.
Notable quotes
“Kevin Wars is just one vote, right? I mean, this this is a committee of 12 and you got to get a majority of votes”
“the cleanest read is from the bond market, the 10-year Treasury yield, and that kind of moved a basis point or two”
“I think he's got a intellectual northstar. He's an economist by training. Waller, of course, is a very good economist”
How the episode opens
Today's number 35. That is Punksatonyi Phil's percentage accuracy rate in predicting either a longer winter or an early spring. Just a reminder, our nation's foremost meteorologist is a large rodent who makes guesses.
And so is our president. Welcome to Profy Markets. I'm Edson.
It is February 3rd. Let's check in on yesterday's market vitals. The major indices climbed after data showed manufacturing activity expanded the most in nearly four years.
Treasury yields also rose as did the dollar. Meanwhile, the gold and silver selloff moderated. More on that in a moment.
And finally, President Trump said the US and India have reached a trade deal and are lowering tariffs immediately. Okay, what else is happening? President Trump nominated Kevin Walsh to be the next chair of the Federal Reserve.
If the Senate confirms him, Walsh will take over in May when Jerome Powell's term expires. Trump said Walsh is quote central casting for the role and promised that he will never let you down. The dollar strengthened after Trump's announcement, but US stocks declined.
Now, one big question is weighing on investors. Will Walsh lead an independent central bank or will he simply deliver all the rate cuts that the president wants? here to discuss this new pick and what it means for the future of the Fed.
We are speaking with Mark Zandandy, chief economist at Moody's Analytics. Mark, welcome back to Profy Markets.
Hey Ed, it's good to be with you. Thanks for the opportunity. — So Kevin Walsh, — Yeah, — I guess we'll just start with your reactions. What do you make of that pick? — Uh, reasonably good choice, Ed. I think, you know, his his strength is he's been on the Fed before during the financial crisis. He was uh Ben Bernankei's uh right-hand man during that period.
From the episode’s captions: roughly the first two minutes, lightly cleaned. Keep watching on YouTube →
Topics
- fed chair nomination
- trump appointment
- disney earnings selloff
- gold trade
- gold as memestock
Companies and tickers mentioned
- DIS
- Moody’s Analytics
- Disney
- Lightshed Partners
Watch the episode
Watch “Why Markets Aren’t Scared of Kevin Warsh | Prof G Markets” on YouTube
Summary, takeaways and quote selection by Octagon. Quotes are short excerpts; the full conversation is in the episode.
More from Prof G Markets
-
Big Tech Is Now Advising the White House — What Could Go Wrong? | Prof G Markets -
Trump Says the Economy Is Strong — Voters Disagree | Prof G Markets -
The AI Divide: Who Wins and Who Gets Replaced | Prof G Markets -
The $1.5B Insider Trade Before Trump’s Iran Post | Prof G Markets -
Is the Oil Crisis About to Break Global Supply Chains? | Prof G Markets -
$1T Moved on Iran “Talks” — Did They Even Happen? | Prof G Markets
Prof G Markets, this episode and its artwork belong to Vox Media Podcast Network. Octagon is not affiliated with the show; this page is an independent summary.
