Kevin Warsh says he sees AI trends which could reduce costs in the long-run, and a golden opportunity and is concerned the Fed cannot see that

• Last thing they need is continuity.


• Central bank that sits there today is radically different from the one he saw in 2006.


• Don't think need continuity, when the central bank does not have credibility.


• Says need regime change at the Fed.


• Cuts last time round, inflation was 50% higher.


• The broad conduct of monetary policy has been broken for a long time.


• When Vulcker became Fed Chair, said how he said regime change.


• Dominant models at the Fed appear to be out of date.


• When asked whether the next Fed Chair will be independent, says in a word "yes". Independence is essential.


• Making the argument the Fed hasn't always been independent, citing DEI, and climate change, amongst others.


• Fed has done a very good job of blaming others for their mistakes.


• Fed has made poor choices regarding inflation.


• The reason Fed has not made the right decision of rates is due to the President and tariffs.


• Hesitancy for the Fed to cut rates in a mark of a sign against them, and the fact they've lost credibility.


• He has made the argument in the past the Fed have been slow to cut rates and they should do, before they cut slightly later.


• Says his experience does help.


• CNBC anchor praises his candidacy for Fed Chair and Warsh says not about getting a job, and more than about one person.


• The first rate cut would be a first step towards regime change.


• Near a housing recession.


• Fed should be out of the fiscal and political business.


• Reiterates rate cuts would be the beginning of the process.


• Regime and policy change should not be done overnight.


• Should be a plan to get out of fiscal policy, to give the power back to US Treasury Secretary Bessent, but cannot be done overnight.


• Need a new Treasury-Fed accord.


• Fed is in such hot water because it has wandered outside of its remit. Fed is a powerful, but narrow constitution.


• Says he is cannot say anything bad about US Treasury Secretary Bessent and says he is doing a great job.


• Fed that is there says hasn't had interest rates right for a long time, and do not look like they've had an idea for a long while.


• Talking about Bernanke, says "no silly dots, or forecasts".


• Most Fed criticism is due to Fed mistakes.


• Talking up ex-Fed Chair Greenspan.


• Thinks regime changes at the Fed will happen in "due course". 

17 Jul 2025 - 13:04- Fixed IncomeEconomic Commentary- Source: Newswires