During his five years as a Fed governor, Kevin Warsh routinely raised concerns about inflation and protecting central bank credibility by ensuring inflation expectations remained anchored, even as he voted throughout most of his tenure to either hold interest rates steady or lower them. Warsh, President Trump's nominee to be the next chair of the Federal Reserve, served on the Fed from 2006 to 2011. A review of his speeches during that time and transcripts of policy meetings paints a picture of an inflati ...

1 February 2026 | 4:12PM EST Economics Research US Daily: Kevin Warsh on Interest Rate Policy, Balance Sheet Policy, and Financial Regulation David Mericle +1(212)357-2619 | david.mericle@gs.com Goldman Sachs & Co. LLC Pierfrancesco Mei +1(212)902-8809 | pierfrancesco.mei@gs.com Goldman Sachs & Co. LLC Investors should consider this report as only a single factor in making their investment decision. For Reg AC certification and other important disclosures, see the Disclosure Appendix, or go to www.gs.com/re ...

Summary of Key Points from the Conference Call Company/Industry Involved - The discussion revolves around the Federal Reserve and its monetary policy, particularly focusing on the nomination of Kevin Warsh as the Fed Chair. Core Insights and Arguments - **Rate Cuts Expectation**: The nomination of Kevin Warsh does not alter the expectation for two additional rate cuts in the second half of 2026, driven by disinflation [5][7][9] - **Policy Framework Shift**: Any significant changes in the Fed's policy framework are anticipated to occur gradually through balance sheet policy rather than through interest rate adjustments [5][7][8] - **Volatility in Macro Markets**: A Federal Reserve led by Warsh is expected to allow for higher volatility and greater signaling qualities in macro markets, potentially steepening the yield curve due to a smaller Fed footprint [5][19][20] - **Balance Sheet Critique**: Warsh has criticized the Fed's balance sheet as "bloated" and advocates for a reduction to mitigate inflation risks and market distortions [10][12][13] - **Interest Rate Policy**: Warsh's views suggest that lower interest rates should accompany a smaller balance sheet, which he believes would enhance price stability and credit transmission [11][12] - **Regulatory Changes**: Warsh's preference for less regulation could positively impact MBS investors, particularly if there are changes to the Basel Endgame proposal that would lower risk weights for loans [33] Other Important but Potentially Overlooked Content - **Investor Sentiment**: Surveys indicate that individual investors are more concerned about inflation than Fed policy, suggesting that the Fed's actions may not be a primary focus for retail investors [35][36] - **MBS Market Impact**: The likelihood of the Fed ending MBS run-off has decreased, and the bar for restarting QE, especially in MBS, is now higher [34] - **Future Fed Actions**: Speculation about the Fed's approach could influence the shape of the yield curve and swap spread curve until Warsh's intentions are publicly clarified [22][29] - **Communication Strategy**: A Warsh-led Fed may adopt fewer communications with the public, which could lead to more market-driven assessments of economic data and policy reactions [21][24] This summary encapsulates the key points discussed in the conference call regarding the Federal Reserve's future under Kevin Warsh's potential leadership, focusing on monetary policy, market implications, and investor sentiment.

Fed governor Michelle Bowman said she supported the decision to hold rates, but also could have voted in favor of continuing to remove policy restraint to hedge more against the risk of further labor market deterioration. ...

Market Overview - US stock markets ended lower due to uncertainty surrounding President Trump's nomination of Kevin Warsh to lead the Federal Reserve, impacting future interest rate policy [1][3][15] - Concerns over the Fed's independence and higher-than-expected inflation data contributed to reduced risk appetite among investors [3][5] Commodity Performance - Gold prices fell approximately 11%, while silver prices dropped more than 30%, reversing a previous rally [7][9] - The selloff in metals significantly affected mining stocks, leading to sharp losses in the sector [4][8] Index Performance - The S&P 500 declined by 0.4%, the Dow Jones Industrial Average also fell by 0.4%, and the Nasdaq Composite dropped nearly 0.9% [7][9] - Small-cap stocks underperformed larger peers due to heightened interest rate concerns [7] Biggest Losers - Newmont, a mining stock, fell by 10.4% as gold prices plunged [9] - Freeport-McMoRan dropped by 7.2% amid the metals sell-off [9] - Microsoft shares extended losses due to weak cloud revenue growth, while Apple slipped 0.3% despite better-than-expected quarterly profits [8][9] Biggest Gainers - Tesla rose by 4.3% following recent profit reports and a recovery from prior losses [10][11] - Consumer staples stocks, particularly Colgate-Palmolive, gained after forecasting higher annual sales [10] Bond Market and Inflation Impact - The 10-year Treasury yield remained near 4.24%, with concerns that the Fed may delay rate cuts due to higher-than-expected producer inflation [12] - Higher yields can pressure stock valuations and dampen investor demand [12] Global Market Outlook - European markets experienced gains, while Asian markets showed mixed performance [13] - Future market direction will depend on interest rate signals, inflation trends, and earnings growth [13]

Core Viewpoint - The Federal Reserve's decision to maintain its key interest rate has significant implications for the U.S. economy and local financial matters [1] Group 1 - The Federal Reserve's decision to hold the interest rate steady indicates a cautious approach to economic conditions [1] - This decision may influence borrowing costs for consumers and businesses, affecting spending and investment [1] - The stability in interest rates could lead to a more predictable financial environment, which may encourage economic growth [1]

Core Viewpoint - President Donald Trump has nominated Kevin Warsh to replace Jerome Powell as the Federal Reserve chairman, highlighting Warsh's potential to be a significant leader for the Fed [1] Group 1: Warsh's Background and Qualifications - Kevin Warsh is a former Fed governor, White House advisor, and Wall Street banker, with a law degree from Harvard and a degree from Stanford University [6] - Warsh served on the Fed's governing board from 2006 to 2011 and has experience as an economic advisor under President George W. Bush [6] Group 2: Market Reactions and Concerns - The immediate reaction on Wall Street was mixed, with stock markets trending lower but trading within a narrow range following Warsh's nomination [2] - There are concerns that Warsh may push for more aggressive rate cuts to satisfy Trump, which could impact interest rates and the stock market [3][4] Group 3: Fed Independence and Future Implications - Warsh's selection has eased some concerns regarding the Fed's independence due to his experience, but there are still worries about potential political influence [2][5] - The general consensus is that Warsh will likely maintain the central bank's independence, despite the political pressures from Trump [5]

The Trump administration is preparing for the president to nominate Kevin Warsh to be the next Federal Reserve chair, according to people familiar with the matter.President Donald Trump said Thursday he plans to announce his pick to lead the US central bank on Friday morning.The people, who requested anonymity to discuss matters not yet public, cautioned that the selection is not final until Trump makes a formal announcement.The White House and Warsh did not immediately respond to requests for comment.Warsh ...

Core Viewpoint - President Trump criticized Federal Reserve Chairman Jerome Powell for maintaining steady interest rates, arguing that rates should be lower given the current inflation situation [1][4]. Group 1: Trump's Criticism of the Federal Reserve - Trump accused Powell of costing the U.S. hundreds of billions of dollars annually due to high interest expenses, asserting that the country should have the lowest interest rates globally because of the influx of money from tariffs [3]. - The president has intensified his public criticism of Powell throughout the year, using personal insults and urging for rate cuts to stimulate the economy [4][5]. Group 2: Powell's Response and Investigation - Powell confirmed that he is under a criminal investigation by the Justice Department regarding his congressional testimony about the Federal Reserve's building renovations, describing the situation as unprecedented [7][8]. - In response to the investigation, Powell deviated from his usual measured approach by addressing the media, stating he would not comment on administration statements or the investigation itself [8]. Group 3: Broader Context of Tensions - The ongoing tensions between Trump and the Federal Reserve coincide with the Supreme Court's consideration of the president's authority to remove a sitting Fed board governor and discussions about a potential successor to Powell [9].

正如市场所料，美联储在连续第三次降息25个基点后，按下降息"暂停键"。 与前次美联储声明比较，本次美联储声明删除了就业风险增加的表述，指出经济形势有改善，尤其在失 业率上升方面已有企稳迹象，暗示联储决策者更谨慎，并不急于继续行动。经济活动方面，本次声明表 述为"经济活动在以稳固的速度扩张"，前次的表述为"经济活动在以温和的速度扩张"。 在利率决定发布后，美联储主席鲍威尔举行了发布会，并就美国当前经济状况及美联储下任主席等问题 接受记者提问，总体而言，他对经济前景做出了略为乐观的评估。 鲍威尔表示，过去一年关税上涨对消费价格的影响已基本传导完毕，"我们预计，关税对商品价格的影 响将达到峰值，然后开始下降，前提是没有新的重大关税上调措施出台，这也是我们预计今年将会看到 的情况。"他表示，美国今年通胀表现大致符合预期，但就任何进一步宽松政策的时间或节奏而言，美 联储还没有做出任何决定。 鲍威尔还表示，他和美联储其他官员致力于维护美联储的独立性。他还对上周出席最高法院的口头辩论 表示，此案"或许是美联储113年历史上最重要的法律案件"，"我仔细考虑后认为，如果我不出席，可能 很难解释清楚原因。" 当地时间1月28日， ...