Trump officially announced the selection of Kevin Warsh as Fed Chair. The market reacted quite positively due to the memories of returning policies.

Kevin Warsh is not a stranger. He served on the Fed Board from 2006 to 2011 and was instrumental in steering the Fed through the 2008 crisis. After leaving the Fed, he became one of the harshest critics of how the Fed handled the post-crisis situation.

He believes that QE did not save the economy. It inflated asset prices, widened inequality, and concentrated benefits towards the financial markets. He referred to QE as "Reverse Robin Hood."

Warsh also rejected the argument that inflation after 2020 was inevitable, directly pointing at Powell and stating it was a "serious policy mistake."

Therefore, in the upcoming Fed term, there likely will not be another massive QE.

Kevin Warsh supports cutting interest rates but will not open liquidity as broadly as previous Fed chairs have. On this point, Kevin shares the same view as Trump:

- Trump wants low-interest rates.

- Warsh wants monetary discipline.

- The greedy market always hopes for rate cuts + QE.

It is too early to predict Kevin's policies since he hasn't even officially assumed the Fed Chair position. However, the general view is likely to keep interest rates at a "moderate" level instead of cutting deeply below 2% as the market expects.