I remember when, several years ago, Kevin Warsh was nominated to be the Chair of the Fed. It was an interesting time—the markets didn’t really know how to react to such a choice. On one hand, you had an experienced official who had already worked on the Board of Governors from 2006 to 2011 and knew the system from the inside. On the other hand, his reputation as an inflation hawk raised serious questions.

Kevin Warsh’s personal stance has always been fairly tough. During the financial crisis, he was worried about inflation risks, even as unemployment was rising. Later, he didn’t support a 50 basis-point rate cut in September 2024. That’s the profile.

And then I look—Trump picks this very candidate, while clearly wanting rate cuts. The logic seemed strange, and I wasn’t the only one who noticed. Volatility in the indices immediately jumped. After their rise, gold and silver reversed, and the dollar strengthened. Wall Street was on edge.

Experts were divided. Some said Kevin Warsh was a safe choice—just a person who thinks independently. Others warned that his hawkish position could mean a steeper yield curve and pressure on long-term rates. There were also those who believed his views raised serious concerns about a possible crisis.

The funniest part is that the market was expecting a dove but got a hawk. Or that’s how it seemed on paper. Kevin Warsh really had once advocated for lower rates, but that didn’t mean his views had changed radically. His track record spoke for itself.

At the time, I was tracking Polymarket and Fed meetings. Any movement in his status affected prices. It was a classic example of how market expectations don’t match reality. People looked at Warsh’s past and understood that what might come next could be nothing like what they had been counting on. And the market reacted to that every time.