Trumponomics Understanding Kevin Warsh's Plan for the Fed
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Feb 11, 2026 Krishna Guha, Evercore ISI vice chairman and former New York Fed official, offers sharp central-bank analysis. He breaks down market moves after Kevin Warsh’s nomination. They discuss Warsh’s pragmatic tilt on inflation, AI and productivity’s policy effects, balance-sheet risks and why rapid quantitative tightening is unlikely.
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Money-Financing Is The Main Inflation Fear
- Warsh sees the biggest inflation risk as fiscal expansion financed by central bank purchases, i.e., near money-financing.
- He views the pandemic episode as that recipe, and says today's conditions are different with a positive supply shock and no active money-financing.
Forward-Looking, Market-Informed Policy
- Warsh aims to be forward-looking, combining deep data sleuthing and market signals rather than relying solely on lagging macro releases.
- He aspires to be part Greenspan (micro data focus) and part Druckenmiller (market-signal reader).
Avoid Replacing Models Without A Plan
- Be cautious: trying to emulate Greenspan/Druckenmiller without excellence risks policy errors.
- Warsh must build a coherent, systematic replacement for backward-looking models before abandoning them.