LARRY KUDLOW: Warsh is the right man for the Fed

Kevin Warsh really is the top man for the job at the Federal Reserve. President Trump has made a superb decision. The brilliant and popular Kevin Hassett will remain as the director of the National Economic Council. And the wise Scott Bessent will stay at the Treasury. It’s a very strong economic team that will hopefully nurture the supply-side productivity-led boom, that has already begun to sprout from the One, Big, Beautiful Bill legislation, authored by Mr. Trump, and signed into law by him on July 4, 2025.

Mr. Warsh has already had a lengthy turn at the Fed. He knows where the bodies are buried, and which economic models must be mothballed. He has a tremendous opportunity to be a transformational figure in Fed history. Mr. Warsh knows that rapid economic growth and more people working do not cause inflation.

In numerous op-ed pieces, he has specified correctly that excess government spending and money printing cause inflation and high interest rates.

As he said in an interview with me on July 7 of last year: "So my simple version of this is run the printing press a little bit less, let the balance sheet come down, let Secretary Bessent handle the fiscal accounts, and in so doing, you can have materially lower interest rates."

I believe Mr. Warsh understands that the bloated Federal Reserve portfolio of bonds has in fact financed big government socialism and inflation, which in turn has led to sclerotic economic growth and excessively high interest rates. He knows that. He has said it many times.

And he is a shrewd analyst of market price signals of excess money and commodity trends that can serve as early warning inflation signals. He has also always subscribed to a sound and stable "King Dollar." He also has to transform and resurrect the Fed’s independence. No more greening the financial system, or climate change, or diversity, equity, and inclusion policies. Those are left-wing fads that are now gone, and should never return to a monetary institution.

Mr. Warsh is an able administrator from his prior years as a Fed governor. And you can bet that he will clamp down on insider stock trading compliance, in ways that Jerome Powell ignored. Mr. Warsh is likely to leave trade and tariff policies to the Trump administration, just as he is more than willing to leave debt management policies to the Treasury Department. In short, he will return the Fed to its earlier and narrower mission, in order to make it more effective.

Mr. Warsh is the right man for the job. He’s also the right man for a new Golden Age in the American economy.