How a Former Fed Vice-Chair Is thinking About the Next Fed Chair

The podcast explores the potential nomination of Kevin Warsh as Fed Chair, focusing on the sociological and market implications of his selection. It questions Warsh's seemingly contradictory stances on inflation and low rates, alongside Trump's known preference for a low-rate policy. Richard Clarida, former vice chair of the Federal Reserve Board, offers insights into the Fed board culture, communication with the Treasury, and Warsh's qualifications. Clarida addresses criticisms of Warsh's past judgments during the financial crisis and his more recent advocacy for lower rates, emphasizing the importance of Fed independence while acknowledging the need for collaboration with the Treasury. The conversation also covers forward guidance, balance sheet considerations, and the role of economic models in formulating monetary policy.