Wall Street can afford to be a little more discerning: There may be aspects of Warsh’s policy stance that benefit investors, while other behavior might leave analysts feeling a little spooked.
One thing’s for sure: No one’s short of opinions when it comes to the new Fed chairman.
Green flag: consensus
Powell staying on at the Fed presents an awkward transition for Warsh at the central bank. Warsh has been critical of the decision-making of the Fed under Powell’s leadership, and argues for a fundamentally more dovish policy stance while his predecessor has favored a wait-and-see approach.
Already, members of the Federal Open Market Committee have demonstrated they’re not comfortable sending overly optimistic signals to markets. At the latest FOMC meeting, regional presidents Neel Kashkari of Minneapolis, Lorie Logan of Dallas, and Beth Hammack of Cleveland all dissented from the post-meeting statement, as they felt it suggested the next move by the group could be a cut—a signal they did not want to send.
