Fed chair nominee sparks relief rather than praise

The one thing that was clear about President Donald Trump's nomination of Kevin M. Warsh as chairman of the Federal Reserve Board, announced Friday, is that the investment community didn’t really know what to make of it.

- Michael Hiltzik, Tribune News Service

Former US Federal Reserve official Kevin Warsh speaking to the media about his independent report at the Bank of England in London.

(Tribune News Service)

The dollar rallied, even though Warsh has been agitating for more rate cuts, which tend to undermine the dollar’s value. Gold and silver spot prices plummeted, with the latter experiencing its worst day in 45 years, as fears about Trump’s attacks on the Fed’s independence eased — despite Warsh’s alignment with Trump's disenchantment with the Fed’s management. The stock market wavered, then recovered through the day Friday, so who knows what those investors think? Economists and economic analysts were all over the place. They debated whether to define Warsh as an inflation “hawk” — that is, pressing or higher interest rates to keep inflation in check — or a “dove” — advocating lower rates to spur economic growth.