So, why did Trump choose him? Aside from the need to calm markets that have been spooked by his attacks on Fed independence, one reason may be that Warsh believes that AI and other technological innovations will reduce inflation and thus allow for lower policy rates.
Now that Kevin Warsh has been nominated as the next chair of the US Federal Reserve Board (Fed), it is worth asking how different a Warsh Fed would be from the current one. President Donald Trump had made it clear that he wants a Fed chair who will push for lower policy rates to juice the economy and support his broader agenda.
But Warsh has a history of monetary hawkishness, voicing concerns about the risk of excessive inflation even during the depths of the post-2008 deflationary cycle. Moreover, he is a mainstream Republican globalist who favours free trade and immigration, not a protectionist-nativist MAGA ideologue.
