Scott Horsley

That means he was particularly concerned about runaway inflation.

Even during the aftermath of the Great Recession, when unemployment crept up towards 10 percent, Kevin Warsh was very concerned that some of the aggressive steps the Federal Reserve was taking to address that and the rest of the government was taking to address that might lead to runaway inflation.

Now, those fears at the time turned out to be unfounded, but

Warsh's reputation was as someone who would really bend over backwards to keep inflation under control.

So it's kind of interesting to now have President Trump picking him to push in the opposite direction, that is, for lower interest rates, even if that might run the risk of letting inflation become more entrenched.

Yeah.

Trump nominated Jerome Powell back in his first term as president to be Fed chair.

And I think he might have used that same central casting language to talk about him.

And of course, they ran afoul of one another when Powell didn't do Trump's bidding during his first term in office either.

I think almost anyone who got this nod would

have to face some tough questions during their confirmation hearing about how much independence they could exercise because Trump has said very clearly he thinks the Fed should follow his instructions when it comes to interest rates, that he would only nominate someone who agreed with him on the need for lower interest rates.

You know, there's an economist at the White House, Kevin Hassett, the other Kevin who was very much in the running for this post.

And I think the sense on Capitol Hill was that Kevin Hassett might have been even closer to the president and therefore less likely to exercise some independence.

That may have ultimately sort of torpedoed Kevin Hassett's chances of the job.

That's right.

And that's why Trump has tried to stack the deck in other ways by installing other loyalists on the board.

He has not been entirely successful at that, but he hasn't given up the effort.

I think it would be very difficult, assuming the Democrats stick together and oppose the nomination, either because they're concerned about Fed independence, or in some cases, they might have concerns about Warsh personally.

But yeah, it'd be hard to get out of the banking committee without a vote of one of the Republicans.

The Republicans have a very narrow majority on that committee, just as they have a narrow majority in the Senate writ large.