Opinion: The new Federal Reserve Chair, Waller, may not be as hawkish as the market expects

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

Warsh previously pointed out that artificial intelligence and productivity improvements are positive supply shocks, which could ease the pressure for tightening policies. He also supports the Federal Reserve reducing its balance sheet, but is unlikely to adopt aggressive tightening measures that could disrupt the market. In a politically tense environment, it is expected that the Federal Reserve’s consensus-driven policies will continue, although they will face unusual pressures.