Get audio access with any FP subscription. Subscribe Now ALREADY AN FP SUBSCRIBER? LOGIN

Get audio access with any FP subscription.

ALREADY AN FP SUBSCRIBER? LOGIN

Kevin Warsh was handpicked to lead the world’s most important bank, with a remit from U.S. President Donald Trump to do one thing: lower interest rates. But economic reality, especially stubborn inflation, won’t allow the Federal Reserve to do that, and so it is now facing the wrath of both financial markets and the White House.

Add to that a novel, confusing, and contradictory communication style, and Warsh’s early steps as Fed chair have been less than encouraging. That is problematic when what the Fed says, almost as much as what it does, has huge implications for the United States and global economies.

Kevin Warsh was handpicked to lead the world’s most important bank, with a remit from U.S. President Donald Trump to do one thing: lower interest rates. But economic reality, especially stubborn inflation, won’t allow the Federal Reserve to do that, and so it is now facing the wrath of both financial markets and the White House.

Add to that a novel, confusing, and contradictory communication style, and Warsh’s early steps as Fed chair have been less than encouraging. That is problematic when what the Fed says, almost as much as what it does, has huge implications for the United States and global economies.

“Warsh doesn’t know how to speak coherently about monetary policy,” said Benn Steil, a senior fellow and director of international economics at the Council on Foreign Relations. “He is in a difficult position right now: He is not an economist, he never mastered the lingo, and he has been appointed by a man who wants him to take a position he has been opposed to for years.”

The central challenge facing the Fed, which was made plain in last week’s........

© Foreign Policy