The Intelligence from The Economist Tug of Warsh: will the new chair politicise the Fed?
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Feb 3, 2026 
Archie Hall, US economics editor who decodes Fed appointments and policy. Erin Connolly, Asia diplomatic editor reporting on Thailand’s youth politics and monarchy. Emma Irving, Hong Kong news editor who tracks local transport and tourism. They discuss Kevin Warsh’s nomination and what it means for Fed independence and rate policy. They cover Thailand’s election dynamics and the monarchy’s influence. They highlight Hong Kong’s tram network’s role in tourism.
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Qualifications Meet Political Signaling
- Kevin Walsh combines establishment credentials with recent political signaling that bends toward Trump's wishes on rate cuts.
- His past hawkishness may clash with recent pro-cut rhetoric, creating uncertainty about future Fed policy.
Limited Influence On Rates, Stronger On Structure
- Walsh may struggle to force large rate cuts because he is one vote on a 12-member committee with few allies.
- He can more plausibly reshape the Fed's structure and shrink its balance sheet, where he has strong convictions.
Balance-Sheet Reduction As A Central Goal
- Walsh prioritizes shrinking the Fed's bond holdings and reducing quantitative easing's role in the economy.
- That agenda aligns with Treasury and some White House officials and could materially change long-term rates and inequality dynamics.