Episode summary
Trump Taps Warsh For Fed Chair, Furman Reacts to Rate Hold
Wall Street Week
· · 11 min · Hosts: Chrystia Freeland, David Westin · Guests: Stephen Miran, Jason Furman
Summary
President Trump’s plan to nominate Kevin Warsh as the next Federal Reserve chair framed the first part of the discussion, with the guest praising Warsh’s “credibility” and “gravitas” and arguing he would be a strong choice to succeed Jay Powell in May, pending Senate confirmation. The host pressed on whether Warsh would be seen as the president’s man inside the Fed, and the guest said policy actions consistent with the data would be the way to prove independence.
The second half focused on the Fed’s decision to hold rates steady and on how close the central bank may be to ending its tightening cycle. The guest said the Fed sounded “happier” because unemployment has stabilized and inflation appears to be softening, even if progress has been uneven. He argued tariff pass-through has been smaller than feared because businesses have absorbed more of the cost and because the effective tariff rate is now lower than originally announced.
The conversation also covered the weaker dollar, rising JGB volatility, and geopolitical risk. The guest said a weaker dollar could help U.S. exports and rebalance trade, but would likely raise consumer prices and be politically unpopular. On Japan, he said bond markets are finally behaving more like standard macroeconomics again.
Key takeaways
- The guest said Kevin Warsh is a “fantastic pick” and expects him to bring “enormous credibility” and “gravitas” to the Fed chair role.
- The guest said the Fed looks “pretty close” to being done with rate hikes because unemployment has stabilized and inflation has softened.
- He argued tariffs have not yet lifted inflation much because businesses have absorbed costs and the average tariff rate is only about 11% to 12%.
- The guest said a weaker dollar could help U.S. exports and reduce trade imbalances, but would likely raise prices for American consumers.
- On Japan, the guest said recent JGB turmoil reflects “the normal rules of macroeconomics applying in Japan, too.”
Notable quotes
“Chairman Designate Warsh has a long and illustrious career and history as a very insightful thinker on monetary policy”
“I think he's a fantastic pick from the president. I think he's got enormous credibility, I think he's got enormous gravitas”
“You do that by taking policy actions that are consistent with the data”
“-We're looking pretty close. And they just sounded happier than they've sounded in a while”
“The dollar has weakened rather significantly. And we had President Trump say, "Yeah, sure, it'll seek its own level”
How the episode opens
Kevin Warsh, a former bank executive and Fed Governor during George W. Bush’s presidency, is set to take over from Jay Powell when he leaves t the seat in May, pending confirmation in the Senate. On the heels of Trump's announce I spoke with Fed Governor Stephen Miran who might find a like minded colleague in the new Fed chair.
Chairman Designate Warsh has a long and illustrious career and history as a very insightful thinker on monetary policy. I think he's a fantastic pick from the president. I think he's got enormous credibility, I think he's got enormous gravitas I think he's got enormous, enormous respect from financial markets from economists, from everyone.
I think he's going to do just a knockout job. I want to talk about your experience, You came to the fed from the White House And I'm sure, you know, people said he was just put there to do what Donald Trump told him to do. Did Donald Trump tell you to do anything in particular, and do you think he told Kevin Warsh that?
even if he didn't, How did you, and how would Kevin fight the perception that he's the president's man inside the Fed? Look, the President has never, ever asked me to do anything on monetary policy. He has never asked me to do any specific action on monetary policy.
He's told me his views on monetary policy, but he tells the whole world his views on monetary policy. You know them as well as I do, right, that's not a secret. He's never asked me to do anything And I wasn't in the room with any of Chairman Designate Warsh’s conversations with the President.
or anybody else involved in the selection process. So I don't know what those conversations were like, but if they were anything like the conversations I had with the President about monetary policy then he wouldn't have asked him to take any specific actions.
From the episode’s captions: roughly the first two minutes, lightly cleaned. Keep watching on YouTube →
Topics
- fed chair nomination
- interest rate hold
- federal reserve policy
- rate decision
Watch the episode
Watch “Trump Taps Warsh For Fed Chair, Furman Reacts to Rate Hold” on YouTube
Summary, takeaways and quote selection by Octagon. Quotes are short excerpts; the full conversation is in the episode.
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