View: Fed's New Chair Powell May Not Be the Hawkish Figure Market Expects

BlockBeats News, February 12th, Krishna Guha from Evercore ISI stated that Kevin Warsh's tough stance on inflation may have been exaggerated. While his nomination initially pushed up yields and weighed down gold prices, Warsh should be seen more as a pragmatic conservative who can distinguish between supply-driven inflation and demand-driven inflation—making Fed policy under his leadership potentially more flexible.

Warsh has previously pointed out that artificial intelligence and productivity gains are positive supply shocks that could ease the pressure for tightening policy. He also supports the Fed's balance sheet reduction but is unlikely to pursue aggressively tight policies that could disrupt the market. In a politically charged environment, the Fed's consensus-driven policy is expected to continue, albeit under exceptional pressure.