Warsh Will Get More Leeway From Trump When It Comes to Rates, Rubenstein Says

David Rubenstein says President Donald Trump will give Fed Chair Kevin Warsh more leeway than Jay Powell, with a clear mandate to avoid raising rates “all that much.” The implication is a more dovish bias for the Fed’s path on policy rates, potentially affecting Treasury yields and rate-sensitive asset pricing. Market impact is likely meaningful given the guidance about the direction and intensity of future rate hikes.

Analysis

David Rubenstein says President Donald Trump will give Fed Chair Kevin Warsh more leeway than Jay Powell, with a clear mandate to avoid raising rates “all that much.” The implication is a more dovish bias for the Fed’s path on policy rates, potentially affecting Treasury yields and rate-sensitive asset pricing. Market impact is likely meaningful given the guidance about the direction and intensity of future rate hikes.