economy
Doubts persist about whether Fed chair nominee Warsh will be independent, CNBC survey finds
Just 50% of respondents believe Warsh will conduct monetary policy mostly or very independently.
TL;DR
- A CNBC survey shows 50% of respondents believe Kevin Warsh will be mostly or very independent as Fed chair, while 46% believe he will not be independent.
- Confidence in Warsh's independence has increased by 13 points since last month following his Senate confirmation hearing.
- Warsh stated he would maintain Fed independence but also committed to working with the administration and Congress on non-monetary matters.
- Concerns exist about Warsh and Scott Bessent potentially remaking the 1951 Treasury-Fed Accord, which separates debt management from monetary policy.
- 58% of respondents predict Warsh will be dovish on interest rates, and 65% predict he will be hawkish on the balance sheet.
- Experts anticipate an average reduction of $800 billion from the Fed's balance sheet in the first year, though 46% doubt it will happen.
- There is debate about the impact of balance sheet reduction on interest rates, economic growth, and the stock market.
- 81% of respondents believe the Fed should only incorporate AI productivity into policy once it is evident in the data, contrary to Warsh's view.