Mike McKee

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?

And the president obviously wants very low rates.

How do you get there?

AI is what Kevin says.

He says that AI, along with the big heavy tech investments we've seen and the president's deregulatory agenda, will move things forward.

AI will be a significant disinflationary force, increasing productivity significantly.

and bolstering american competitiveness productivity improvements should drive significant increases in real take-home wages a one percent point increase in an annual product productivity growth would double standards of living within a single generation so he's putting a lot of his for a forecast on what silicon valley can accomplish in terms of ai and uh the tech world

The thing about Warsh and the reason you're seeing markets react the way they are at the moment is that he was very, very hawkish when he was on the Fed before.

Even when inflation was low, he wasn't ready to cut interest rates.

And obviously that's completely contrary to what President Trump wants.

So how does he handle that?

And how does he see the role of interest rates in keeping the economy afloat and bringing inflation down?