Kevin Warsh Is 'Fantastic' But 'Unpredictable' Says Subramaniam

Summary

Subitha Subramaniam of Sarasin & Partners discusses reports that Kevin Warsh may be nominated as the next Federal Reserve chair. She sees Warsh as an orthodox but unpredictable candidate, especially because he believes AI will drive materially lower prices. She also highlights the tension between Trump's desire for lower rates, fiscal debt pressures, and the risk that loose monetary policy pushes up long-end Treasury yields. The dollar and short-term rate paths remain uncertain under a Warsh-led Fed.

• Subitha Subramaniam assesses Kevin Warsh as a possible Fed chair.
• Warsh is described as orthodox, intellectually strong, but unpredictable.
• He favors a narrow Fed, smaller balance sheet, and less frequent communication.
• His AI-driven disinflation view could justify rate cuts despite current data.
• US debt-to-GDP and interest burden pose challenges for monetary policy.
• Loose Fed policy could raise long-end yields and steepen the curve.
• The dollar and short-term rate paths remain uncertain under Warsh.