Kevin Warsh’s first press conference as Fed chair after last week’s FOMC meeting settled a question that the markets had been debating for a year: Which Warsh would show up? In the past, Ed and Elias explain, Warsh hawkishly prioritized fighting inflation, but he presented himself as a dove when auditioning for the Fed chairmanship. Would Chair Warsh be some new hybrid? The hawk won: The FOMC swung to a tightening bias as expected, and Warsh’s rhetoric was hawkish point for point. The bottom line: Investors would be well advised to position for a chair who will advocate for raising rates if the data demand it, not for lowering them just because the President demands it.
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