Trump’s man is a threat to spark a Wall Street meltdown

June 24, 2026 — 11:59am

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Blame Kevin Warsh for a plunge in technology related shares over the past few trading days that wiped out nearly $US1 trillion ($1.45 trillion) from the value of Elon Musk’s SpaceX.

It is no coincidence that the selloff of tech shares – particularly semiconductor makers, but more generally everything artificial intelligence-related – started on Thursday.

That was the day the US Federal Reserve Board’s Open Market Committee’s first meeting chaired by Warsh ended.

The rate-setting committee provided a clear message – buttressed by a “hawkish” tone from Warsh himself – that it was more likely that the Fed would be raising US interest rates by the end of the year than lowering them.

In fact, everything that flowed from that meeting and the announcement of Warsh’s five taskforces to review the way the Fed communicates and operates pointed to a more conservative, smaller, less interventionist central bank in future.

There was something coincidental about the timing of that Fed meeting, with former long-serving Fed chairman, Alan Greenspan, dying this week.

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Warsh’s plan for a smaller Fed balance sheet that holds fewer bank reserves would pass much of the responsibility and risk of supplying liquidity to markets.

Instead of the “Greenspan put” – a conviction borne out of the way the Greenspan Fed intervened to put a floor under financial markets during the Asian financial crisis, the Long-Term Capital Management collapse, the bursting of the dot-com bubble and the 1987 sharemarket crash – markets would have to price risk into asset prices.

Greenspan’s tenure as chair was characterised by a willingness to bail out financial markets, loose monetary policy and financial deregulation. If Warsh is true to his stated convictions, his Fed will be very different (and a major disappointment for Donald Trump).

Technology stocks, especially AI-related stocks – and most particularly SpaceX with its stratospheric valuation that capitalises a........

© The Age