Kevin Warsh, an angry Trump and Jerome Powell Déjà vu: how history is repeating itself

Kevin Warsh had a very thin tightrope to walk yesterday: get too dovish, and risk his credibility with the bond market; but get too hawkish, and stocks would get sad. At first, it seemed like he tipped too far into the hawkish side as the S&P fell to the lowest close since July. By Thursday morning, traders had decided they were over it.

The Nasdaq rallied over 400 points, or 1.6%, the S&P rallied more than 1%. The Dow added 224 points, or 0.4%, which is not nothing after it fell more than 630 points the day before. The whole thing lasted about as long as a hangover.

The only person who didn’t cheer was the president. Trump told reporters late Wednesday that he’d spoken to Warsh before the vote; a communication Warsh himself refused to talk about during the conference. 

 “I talked to Kevin, and I said, you might as well vote with the Board because it’s not gonna matter,” he said, describing the committee as “very hostile” and “very political.” Then he went to Truth Social to demand rates of “1%, or less, because we are the Best Credit in the World—BY FAR,” adding........

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