Kevin Warsh.. Is he bringing "the Hawk" back to the dollar?
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In Washington's corridors, rumors abound, but in "Financial Markets," money doesn't lie.
Prediction Platforms (Prediction Markets) turned the tables in hours, placing Kevin Warsh at the top with a nearly 48% chance of succeeding Jerome Powell.
This is not just a change of names; it's a shift in the entire "doctrine" of the Federal Reserve.
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Who is this man?
Kevin Warsh is not an academic who spent his life among books and theories; he is a "banker" from the heart of Wall Street, and was the youngest member in the history of the Federal Reserve Board (36 years old) at the time of his appointment.
He is the man who sat in the control room during the 2008 crisis, knows how banks collapse, and - most importantly - how they are saved with "cheap money," which he now criticizes the most.
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His philosophy:
Enemy of "easy printing" unlike Powell, who tends to calm markets, Warsh is known as a "hawk" (Hawk) monetary.
He believes that the "quantitative easing" (QE) policies - printing money to buy bonds - which markets have been addicted to since 2008, are a dangerous "drug" that distorts asset prices and creates bubbles that do not reflect reality.
Warsh believes that the role of the Federal Reserve is to protect the value of the currency (Price Stability), not to guarantee the rise of the stock market.
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The biggest paradox: Why does Trump want him?
Here lies the plot.
Trump wants "low interest" and a competitive currency, while Warsh, the "hawk," hates inflation.
The secret lies in the apparent agreement:
Trump stated that Warsh "believes in the need to cut interest rates."
The deal might be as follows:
Warsh cuts interest rates (to satisfy growth), but stops "printing money" (to satisfy fiscal discipline).
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What does this mean for your portfolio?
The end of the "Fed Put" (Fed Put): With Warsh, the era of the Fed intervening immediately to save stocks at any 10% decline may end.
He believes markets should correct themselves to be healthy.
-
Return of "Sound Money" (Sound Money):
Having a figure who believes in the value of the currency could give the dollar strength in the long term, and pressure assets that are solely fueled by excess liquidity (like some losing tech stocks).
Bond Market:
Bonds might breathe a sigh of relief;
because having someone who hates inflation at the head of the Fed is the best news for lenders.
-
Summary:
If Jerome Powell is the "liquidity engineer,"
then Kevin Warsh might be the "discipline engineer."
Markets may face a short-term shock to adapt to the idea that the "money tap" won't be open forever...
But for the real economy?
This bitter medicine might be what we need.
Share your opinion with me..
Do you prefer a "hawk" who protects your money's value,
or a "dove" who raises your stock values?
Follow me for more in-depth analyses$GT #NonfarmPayrollsBeatExpectations
-
In Washington's corridors, rumors abound, but in "Financial Markets," money doesn't lie.
Prediction Platforms (Prediction Markets) turned the tables in hours, placing Kevin Warsh at the top with a nearly 48% chance of succeeding Jerome Powell.
This is not just a change of names; it's a shift in the entire "doctrine" of the Federal Reserve.
-
Who is this man?
Kevin Warsh is not an academic who spent his life among books and theories; he is a "banker" from the heart of Wall Street, and was the youngest member in the history of the Federal Reserve Board (36 years old) at the time of his appointment.
He is the man who sat in the control room during the 2008 crisis, knows how banks collapse, and - most importantly - how they are saved with "cheap money," which he now criticizes the most.
-
His philosophy:
Enemy of "easy printing" unlike Powell, who tends to calm markets, Warsh is known as a "hawk" (Hawk) monetary.
He believes that the "quantitative easing" (QE) policies - printing money to buy bonds - which markets have been addicted to since 2008, are a dangerous "drug" that distorts asset prices and creates bubbles that do not reflect reality.
Warsh believes that the role of the Federal Reserve is to protect the value of the currency (Price Stability), not to guarantee the rise of the stock market.
-
The biggest paradox: Why does Trump want him?
Here lies the plot.
Trump wants "low interest" and a competitive currency, while Warsh, the "hawk," hates inflation.
The secret lies in the apparent agreement:
Trump stated that Warsh "believes in the need to cut interest rates."
The deal might be as follows:
Warsh cuts interest rates (to satisfy growth), but stops "printing money" (to satisfy fiscal discipline).
-
What does this mean for your portfolio?
The end of the "Fed Put" (Fed Put): With Warsh, the era of the Fed intervening immediately to save stocks at any 10% decline may end.
He believes markets should correct themselves to be healthy.
-
Return of "Sound Money" (Sound Money):
Having a figure who believes in the value of the currency could give the dollar strength in the long term, and pressure assets that are solely fueled by excess liquidity (like some losing tech stocks).
Bond Market:
Bonds might breathe a sigh of relief;
because having someone who hates inflation at the head of the Fed is the best news for lenders.
-
Summary:
If Jerome Powell is the "liquidity engineer,"
then Kevin Warsh might be the "discipline engineer."
Markets may face a short-term shock to adapt to the idea that the "money tap" won't be open forever...
But for the real economy?
This bitter medicine might be what we need.
Share your opinion with me..
Do you prefer a "hawk" who protects your money's value,
or a "dove" who raises your stock values?
Follow me for more in-depth analyses$GT #NonfarmPayrollsBeatExpectations
