222. The Man Who Just Stood Between Trump and Economic Chaos

But I want to, I want to go to the Fed for a second because Trump tried to defend Warsh last night.

I don't know if you saw that because you're in Hong Kong.

He told one of the CNN journalists that, uh, "You know, Kevin called me.

He wants to lower rates, but he's got a unanimous decision by the board, and the board is really bad for America, and they're really bad people, but Kevin's a good guy" because in Trump's mind, I know how he thinks.

He's got egg on his face in his mind.

He wants the rates to be lower.

But the United States, Katty, could never do what Trump is asking if they want to maintain their status as the reserve currency.

Trump is saying that rates should be 1% or less because we are the best credit in the world by far.

That's literally a quote from him.

But I just want to point out to everybody listening, you can't have core 3.3% inflation and have 1% rates on your overnight yields, okay? That is not sustainable for a country, and that would break down the fabric of trust in our financial system, which is still the deepest, most liquid market in the world.

Yeah, I mean, that's basically what Kevin Warsh said, right? He gave a very brief press conference.

He said, "Inflation is too high.

I am gonna have to do something about it." He hinted at the fact that there could be another rate raise coming later this year as well, which is what investors here in Hong Kong certainly expect there to be.

I thought it was interesting, two things.

One, he didn't give Kevin Warsh a nickname, which always is a strange thing when Trump doesn't call you out with a nickname.

Remember Too Late Powell? Anyway, for the moment, Warsh seems to be on good ground, and I think it's 'cause Warsh has played the politics of this much better than Jay Powell did.

Warsh lobbied, you and I know this, he fought hard for this job.

He has wanted this job for a very long time.

He lobbied Trump very well.

He, a little bit kind of Mark Carney-esque.

He's been very good at getting inside Trump's head.

He signaled to Trump that this was coming.

He gave Trump a bogeyman that he could fight against, which was the board of governors.

He said there was another e- enemy that Trump could call out here.

He didn't have to call out Kevin Warsh, who after all, Trump had said is straight out of central casting.

But I want to, I want to go to the Fed for a second because Trump tried to defend Warsh last night.

I don't know if you saw that because you're in Hong Kong.

He told one of the CNN journalists that, uh, "You know, Kevin called me.

He wants to lower rates, but he's got a unanimous decision by the board, and the board is really bad for America, and they're really bad people, but Kevin's a good guy" because in Trump's mind, I know how he thinks.

He's got egg on his face in his mind.

He wants the rates to be lower.

But the United States, Katty, could never do what Trump is asking if they want to maintain their status as the reserve currency.

Trump is saying that rates should be 1% or less because we are the best credit in the world by far.

That's literally a quote from him.

But I just want to point out to everybody listening, you can't have core 3.3% inflation and have 1% rates on your overnight yields, okay? That is not sustainable for a country, and that would break down the fabric of trust in our financial system, which is still the deepest, most liquid market in the world.

Yeah, I mean, that's basically what Kevin Warsh said, right? He gave a very brief press conference.

He said, "Inflation is too high.

I am gonna have to do something about it." He hinted at the fact that there could be another rate raise coming later this year as well, which is what investors here in Hong Kong certainly expect there to be.

I thought it was interesting, two things.

One, he didn't give Kevin Warsh a nickname, which always is a strange thing when Trump doesn't call you out with a nickname.

Remember Too Late Powell? Anyway, for the moment, Warsh seems to be on good ground, and I think it's 'cause Warsh has played the politics of this much better than Jay Powell did.

Warsh lobbied, you and I know this, he fought hard for this job.

He has wanted this job for a very long time.

He lobbied Trump very well.

He, a little bit kind of Mark Carney-esque.

He's been very good at getting inside Trump's head.

He signaled to Trump that this was coming.

He gave Trump a bogeyman that he could fight against, which was the board of governors.

He said there was another e- enemy that Trump could call out here.

He didn't have to call out Kevin Warsh, who after all, Trump had said is straight out of central casting.