Depends on where in the economy you are, you may love Federal Reserve Chair Kevin Warsh or wish he had a replacement. The reason is Chair Warsh’s focus will be on fighting inflation. The last time Mr. Warsh was on the Federal Reserve, there was a housing crisis, the Federal Reserve Chair Hank Paulson used as many tools as he could to stabilize the banks and try to ensure the banks did not cut off credit. Mr. Warsh believed the Chair should have fought inflation.

In an article by Howard Schneideider of Reuters, every year we all believe the world has been become more complex and interrelated, and hopefully with the use of AI, the modeling should be better. However, there are now a more intense and polarized information environment, and markets accustomed to a steady diet of top policy-maker commentary.

The Fed held the rate steady in the range between 3.5% and 3.75%, where they have been operating since December.

Former Fed Chair Jerome Powell used simple factual statements such as inflation is elevated. Chair Warsh said inflation was elevated relative to the Committee’s 2% target.

The committee will deliver price stability.

Linking to dividend paying stocks, Chair Warsh should be good for investors on Wall Street because the Chair is an inflation hawk. If you expect the Fed to ease into the economy to help everyday people, the answer will be likely not. In the 1930’s inflation was low, but unemployment was high. Ideally that is not a good outcome.

There are more questions than answers, till the next time – to raising questions.