Kevin Warsh was officially sworn in as the 17th Chairman of the United States Federal Reserve (Fed) on May 22.
With the appointment, he replaced Jerome Powell after receiving a narrow support vote in the United States Senate.
Warsh took over the Fed at a time when the United States was still facing high inflation, a balance sheet worth $6.7 trillion and a crypto market sensitive to Fed policy.
His experience shows that he is more inclined to strict economic policies and less intervention in the market.
Here are 3 important things about Kevin Warsh:
1. Wants to control inflation more strictly
Warsh believes that the Fed has previously printed too much money and intervened in the economy since the 2008 financial crisis. According to him, this action has made inflation increasingly difficult to control.
Now interest rates in the United States are still high, and Warsh wants the Fed to focus more on lowering inflation even though it may put pressure on financial markets.
He also wants to:
Reduce the size of the Fed's asset holdings
Reduce the injection of money into the market
Tighten monetary policy
That's why many investors see him as a "hawkish" or more hawkish person on economic matters.
2. More open to Bitcoin and crypto
Compared to previous Fed leadership, Warsh is seen as more positive about Bitcoin and digital assets.
He has said that Bitcoin can be a strong store of value asset and considers crypto to be part of the US financial system.
In addition, Warsh also:
Does not support a central bank digital currency (CBDC)
Has large investments in digital assets
Involved in several crypto-related projects
Although high interest rate policies are usually bad for the crypto market, Warsh's support for Bitcoin gives investors confidence in the long term.
3. Wants to change the way the Fed communicates with the market
Warsh also wants the Fed to give investors less early 'hints' about monetary policy decisions.
He plans to:
Reduce Fed press conferences
Reduce early guidance on interest rates
Take a new approach to controlling inflation
This means that the market may find it harder to predict the Fed's next steps.
As a result, stock and crypto markets may become more volatile in the short term as investors get less guidance from the Fed.
The first Fed meeting under Kevin Warsh will be the focus of the market to see if he really brings about a major change to the US economy and the crypto market.
