Mike McKee

But as a Fed governor, I mean, as you know well, the job of the Fed chair

is not just their opinions on where policy should go, but it's building consensus, you know, in the room itself.

And so with the current makeup of the FOMC, I mean, you think about some of the views on interest rates, on the balance sheet.

Do you think that Warsh will be able to basically build that consensus with that makeup?

Yeah, we have a lot of good snacks on the desk right now, actually.

But we should talk about the balance sheet because one of the differentiating factors of Kevin Walsh

It's also his views on the balance sheet.

We know that he's skeptical about expanding it to the extent that the central bank has.

Very skeptical about QE as well.

And the point has been made to me today on Bloomberg television.

You know, if the Fed is going to step away from a stance where it's using the balance sheet to influence the shape of the curve, that you could see long end rates go higher.

That obviously wouldn't be good news for mortgage rates, which I know that President Trump is very focused on.

And I wonder, you know, whether those views hold any water with you.

Yeah, whether or not stepping away from expanding the balance sheet will translate into higher long-end rates.

Well, Warsh is going to be someone who upsets the apple cart, which is perhaps a little bit of his training out in Silicon Valley.

He graduated from Stanford and is still a visiting lecturer there and a fellow at the Hoover Institution.

He believes that inflation is the Fed's only job, and that's why he gets this hawkish reputation.

And he also is concerned with some of what happened with Silicon Valley Bank and the way the Fed regulates banks.

So look for some changes there.

The big question, though, is how low should interest rates go?