Warsh Will Get More Leeway From Trump When It Comes to Rates, Rubenstein Says

Summary

David Rubenstein, Carlyle Group co-founder, discusses Fed Chair Kevin Warsh's independence and rate policy outlook. He expects Warsh to hold off raising rates for at least another quarter due to Trump's trust and a perceived mandate to avoid tightening, despite inflation from oil and geopolitical tensions. Rubenstein also foresees the Fed becoming less transparent under Warsh.

• Rubenstein argues Kevin Warsh has a mandate not to raise rates much and will delay hikes as long as possible.
• Trump gives Warsh more leeway than Jay Powell, reducing political pressure to tighten.
• Inflationary pressures persist from war and higher oil prices.
• Oil prices may recede but residual inflation remains.
• The Fed under Warsh will likely be less transparent, with fewer press conferences and less forward guidance.
• Rubenstein believes the Fed can wait another quarter before deciding whether to raise rates.