President Donald Trump announced Friday that he is nominating Kevin Warsh to be the next Federal Reserve chairman, replacing Jerome Powell, whose term ends in May.

Warsh worked as an aide to former President George W. Bush, who later appointed him to the board of the Federal Reserve. The youngest ever Fed governor, Warsh served in that position from 2006 to 2011. He also previously worked as a mergers and acquisitions specialist at Morgan Stanley, and during his tenure as a Fed governor, served as a liaison between the central bank and Wall Street. He helped arrange the government’s bailout of insurance giant AIG. (RELATED: ‘Repeating Mistakes Of The Past’: Outgoing SEC Commissioner Warns Trump Letting Wall Street Off Hook)

The most important thing we need to know about Warsh’s background is where he stands on monetary policy, inflation, and interest rates. And, the fact that he was dead wrong about the housing market in the lead-up to the 2008/2009 Financial Crisis.

WASHINGTON, DC – APRIL 18: Jon Hilsenrath, Author, chats with Adam Posen, President, Peterson Institute, Kevin Warsh, Former Member, Federal Reserve Board of Governors; and Karen Karniol-Tambour, Co-CIO, Bridgewater at The Semafor 2024 World Economy Summit on April 18, 2024 in Washington, DC. (Photo by Tasos Katopodis/Getty Images for Semafor)

Throughout his career, Warsh has cultivated an image of an inflation “hawk” rather than a “dove.”

Roughly, the Fed hawks believe that keeping inflation low and prices stable is absolutely paramount to the U.S. economy. The Fed doves, on the other hand, are more loose with monetary policy, and believe that spurring economic and job growth by lowering interest rates and making money........

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