- “I would say he should be very worried, yeah. He should be.”
- “Not much” doubt that interest rates will be lowered
- Warsh wouldn’t have gotten the job if he favored hikes
- Says his administration could use “a softer touch” in its immigration enforcement operations
Trump is speaking in an interview on NBC.
Oil is up $2.04 to $65.25 today as the market evaluates whether the US is headed to war or not. At this point, I’d say strikes are likely but — as we saw last year — strikes don’t always escalate and the oil fields are a long ways from the nuclear sites.
The problem for oil bulls is that late this week, they bid up crude only to get smoked in a 5% fall on Monday. We’re now back near the highs of last week and the two-way risks are obvious.
WTI crude oil daily
As for Warsh, the market still thinks he’s a hawk and no one really knows the answer. We have seen an acceleartion in US data lately and the Citi Economic Surprise Index is at the highest in a year. Today, the ISM services index was mostly in line but the prices paid component jumped.
At some point, Warsh will care more about his legacy than orders from Trump and no one wants to be remembered as the Fed chair who let inflation run away. Will that be on Day 1? I highly doubt it so the Warsh risks are now on the back burner. Even in confirmation, I doubt we get any really revealing answers.
The key speeches will be the first ones after he’s confirmed and in the short term, it might be even more important if Powell leaves or stays on as a governor when his term ends in May.
