Kevin Warsh Will Not Be The Fed Chair Trump Expects
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David B. McMillan629 FollowersFollow5ShareSavePlay(22min)Comments(2)Follow us on Google for the latest stock newsFollow Seeking Alpha on Google for the latest stock newsSummaryPresident Trump is buying a dove but getting a hawk with his pick of Kevin Warsh to lead the Fed.A transition from Powell to Warsh would mark a shift from data-driven gradualism to rules-based, less transparent monetary policy.Warsh's likely approach—shrinking the Fed balance sheet while lowering rates—creates clear winners (banks, small caps) and losers (long-term bondholders, REITs).This approach does not strictly represent loose monetary policy.Sticky inflation, supply shocks, and AI-driven labor market disruption limit the Fed's dovish options and heighten market volatility into 2027. Douglas Rissing/iStock via Getty Images Introduction The next Chairman of the Federal Reserve has an unenviable job ahead of him. The current economic climate seems mildly stagflationary, which could be exacerbated by both AI’s threat to the job market (a deflationary effect) and the supply shocks due to theThis article was written byDavid B. McMillan629 FollowersFollowMy name is David B McMillan and I am an investor interested in fundamental valuation. My philosophy is fundamental investing - I seek to identify underpriced securities relative to their potential future cash flows. I also use tactical allocation, investing more aggressively when equity prices are lower, and more conservatively when they are higher. I have a BS in Physics and BA in Philosophy from UCSB, and am currently a CFA Level 2 candidate. I am mostly interested in covering stocks in the aerospace and defense sector, but I am also interested in retail and tech companies. I have a 12 year investing track record, with documented investments in AI, tech, and crypto themes before they were widely understood - NVDA in 2017, 8000 percent gain; PLTR at IPO, 1870 percent gain; AMD in 2017, 3700 percent gain; TSLA in 2016, 3400 percent gain. Had all of Mag 7 in my portfolio by 2018, before those stocks were called the Mag 7. My current demo portfolio, started in April 2025 with about $8k of my my own capital, is so far achieving a Sharpe ratio of 3.49 compared to IVV of 2.42 in the same time period. My average time-weighted return is 0.30 percent per day vs IVV at 0.14 percent per day.Analyst’s Disclosure: I/we have a beneficial long position in the shares of SPY either through stock ownership, options, or other derivatives. I wrote this article myself, and it expresses my own opinions. I am not receiving compensation for it (other than from Seeking Alpha). I have no business relationship with any company whose stock is mentioned in this article. Seeking Alpha's Disclosure: Past performance is no guarantee of future results. No recommendation or advice is being given as to whether any investment is suitable for a particular investor. Any views or opinions expressed above may not reflect those of Seeking Alpha as a whole. Seeking Alpha is not a licensed securities dealer, broker or US investment adviser or investment bank. Our analysts are third party authors that include both professional investors and individual investors who may not be licensed or certified by any institute or regulatory body.