Opinion: Federal Reserve's new Chair Powell may not be the hawkish figure the market expects

BlockBeats News, February 12 — Krishna Guha of Evercore ISI stated that Kevin Warsh’s tough stance on inflation may be exaggerated. Although his nomination initially pushed up yields and lowered gold prices, Warsh should be viewed more as a pragmatic conservative who can distinguish between supply-driven inflation and demand-driven inflation — this could make the Fed policies under his leadership more flexible.

Warsh previously pointed out that advancements in artificial intelligence and productivity are positive supply shocks that could ease the pressure of tightening policies. He also supports the Fed reducing its balance sheet but is unlikely to pursue aggressive tightening policies that could disrupt markets. In a politically tense environment, the consensus-driven policies of the Fed are expected to continue, despite facing unusual pressures.

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