Moody's Talks - Inside Economics Wurm on Warsh
Feb 2, 2026
Martin Wurm, a Moody's Analytics financial economist who covers the Federal Reserve, discusses Kevin Warsh as a potential Fed chair. They explore Warsh's inflation-first stance, his push to narrow the Fed’s toolkit, debates over QE and regulation, and whether his views would reshape Fed independence. Short takes on market reactions and productivity’s role in rate policy round out the conversation.
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Mixed Market Reaction Signals Cautious Repricing
- Markets showed muted bond-market reaction to Warsh's nomination while gold, silver and crypto fell sharply.
- That suggests traders saw less tail risk for runaway inflation but kept core yields stable.
Hawkish Tilt Framed Around AI Productivity
- Kevin Warsh is portrayed as hawkish, prioritizing price stability over full-employment tradeoffs.
- He frames a productivity/AI boom as a rationale to lower rates despite his hawkish lean.
Return To A Narrow Fed Mandate
- Warsh advocates a narrow central bank focused on price stability and limited QE outside crises.
- He argues large Fed intervention encourages fiscal profligacy and long-term inflation risk.