His first press conference seemed to confirm this. Warsh stressed up front and repeatedly that the Fed can and will bring inflation back to the 2% target, after missing it to the upside for five straight years. He did not mince words or hide behind supply shocks. As markets found some relief in the announcement of a US-Iran deal and oil prices fell, he could have argued that the energy price shock would hopefully prove…dare I say,… “transitory.”
First impressions count, and Kevin Warsh came out as a hawk in his first press conference as the new Federal Reserve (Fed) chair.
I was not surprised. I had been puzzled by how many people in the media and in the markets believed that Warsh would come into the job simply to fulfil US President Donald Trump’s desire for lower interest rates. I have argued in public and in client meetings that, based on his track record, if anything, Warsh seemed likely to be the most hawkish Fed Chair we had seen since Paul Volcker in the 1980s.
