Kevin Warsh Is Making A Promise He Probably Can't Keep
Quoth the Raven
· QTR’s Fringe Finance
· July 14, 2026 at 18:02
· ⏱ 8 min read
| Read on Substack ↗
Summary
Kevin Warsh's inflation-fighting promises as Fed chair are likely to fail because history shows the Fed always caves to market pressure during a crash, choosing to print money and rescue assets over maintaining price stability. The unsustainable fiscal and monetary backdrop means returning inflation to 2% would require pain that politicians, Wall Street, and the public won't tolerate, so the printing presses will win again.
•Warsh told lawmakers the Fed's 'clear and constant aim' is to get monetary policy right and make the inflation surge 'a thing of the past'.
•The article notes that every Fed chair sounds like an inflation hawk 'until something breaks' — quoting Mike Tyson: 'Everyone's got a plan until they get punched in the mouth.'
•Inflation has been running above the Fed's target for years, government debt has exploded, and fiscal deficits remain enormous.
•The author argues that returning inflation to 2% likely requires slower growth, higher unemployment, compressed asset valuations — all things 'politicians and investors suddenly discover they hate'.
•History shows Fed chairs eventually choose between defending markets and defending the dollar — and 'markets usually win'.
•The real test for Warsh will come during 'the next serious equity market crash' when calls to cut rates and print money come from Capitol Hill, the White House, and Wall Street.