It’s time for Kevin Warsh to step up as Fed chair

HousingWire

On today’s episode, Editor in Chief Sarah Wheeler talks with Lead Analyst Logan Mohtashami about the Jackson Hole summit and what Fed Chair Kevin Warsh needs to do at this meeting.   Related to this episode:   Fed hawks are on the war path, sending mortgage rates higher  https://www.housingwire.com/articles/10-year-yield-fed-hawks/   HousingWire | YouTube⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠  https://www.youtube.com/channel/UCXDD_3y3LvU60vac7eki-6Q   HousingWire Mortgage Banking Summit – October 1  https://events.housingwire.com/mortgage-banking-summit-2026?utm_source=housingwire&utm_medium=website&utm_campaign=hwd_podcast_0727   More info about HousingWire  https://lnk.bio/housingwire   Top 5 Trending:   Ryan Serhant doesn’t want to buy your brokerage. He wants your agents  https://www.housingwire.com/articles/ryan-serhant-growth-earned/   Mortgage lenders weigh AI, alternative data and credit models  https://www.housingwire.com/articles/mortgage-credit-ai-alternative-data/   The Iran conflict’s impact on housing demand  https://www.housingwire.com/podcast/the-iran-conflicts-impact-on-housing-demand/   Lisa Cook’s lawyer says Trump lacks legal basis to remove Fed governor  https://www.housingwire.com/articles/lisa-cook-mortgage-allegations-fed-removal-trump/   REMAX co-founder Gail Liniger dies at 81  https://www.housingwire.com/articles/gail-liniger-remax-dies-81/   Want more from Sarah? Don’t forget to subscribe!   The HousingWire Daily podcast brings the full picture of the most compelling stories in the housing market reported across HousingWire. Each morning, listen to editor in chief Sarah Wheeler talk to leading industry voices and get a deeper look behind the scenes of the top mortgage and real estate.

Transcript

00:11Welcome, everyone. I'm joined by my podcast partner, lead analyst, Logan Motoshami, to

00:15talk about the Jackson Hole Symposium today and what Fed Chair Kevin Warsh needs to do at this

00:20meeting. Before we dive in, here are the top five trending articles on housingwire.com.

00:25First is, Ryan Serhant doesn't want to buy your brokerage. He wants your agents.

00:30Followed by, mortgage lenders weigh AI, alternative data, and credit models. Then we have, how

00:35the Iran conflict is impacting housing demand. And Lisa Cook's lawyer says Trump lacks legal

00:41basis to remove Fed governor. Finally, we have a sad one. REMAX co-founder Gail Linegar dies

00:47at 81. Our hearts go out to REMAX and everyone who knew Gail. Okay, we are ready for today's

00:53topic. Logan, welcome back to the podcast.

00:56It is wonderful to be here. And it's that time of the year again, Jackson Hole. I had

01:04to make an AI of Kevin Warsh at Jackson Hole surrounded by hawks.

01:09It was so good. Screaming hawks, just, you know, screeching right in his ear. And he's like,

01:15oh, it is what it is. I mean, of course, I'm hashtag the only person in America that was hashtag

01:23anyone would Warsh. But we'll have to discuss how, what this means and what matters going out. Because

01:33again, for me, so much of the rate hikes are already priced in the market. So it shouldn't

01:38be a surprise. But it's getting to that next stage of where the Federal Reserve

01:43is thinking.

01:45So this will be interesting, because Kevin Warsh has said that he doesn't want to do as much

01:50talking. But tomorrow, he has to do talking. That's, that's what he's there for, right? The

01:54symposium. What do you think he's going to, what do you think the tone of his speech will be?

01:59Um, see, Kevin doesn't want to talk. And that's kind of the problem. Kevin Warsh wants to stay as

02:12quiet as possible and let the markets handle it. Well, Kevin Warsh would have been perfect for a

02:19Mitt Romney presidency and a Paul Ryan VP. But because President Trump is an agent of chaos,

02:29Beth Hammock has taken over the Fed, and markets are going with her. So what is Kevin Warsh doing?

02:36You know, he's waiting for a task force. And I think for him, it probably would be better if he

02:44kind of reaffirms the Fed's general policy, almost like sound like Powell, to maybe get the markets that,

02:53you know, if things start to get out of line, I don't care what Donald Trump says, we'll hike rates

03:00because, you know, we can't let inflation break out. So that, that to me is, is probably the best

03:07case scenario for him. Because I mean, I don't necessarily even think he's that big of a deal.

03:14I think Beth Hammock is the deal. So you got to run with her more than Kevin Warsh. But because

03:20it's

03:20Kevin, and he's, he is supposedly the head of the Fed, it's his time to shine. And we'll see

03:27what he says.

03:28So if you're Warsh, do you approach this tomorrow and think like, you know, I need to take back the

03:33narrative that it's not the Hawks that are running the Fed? I need to reassert the fact that it's me

03:39and we're going in this direction?

03:41No, I think the markets would puke that up. You know, I don't, I think there's a reason why I

03:49said hashtag anyone for Warsh. And this is the problem that I thought he would have.

03:55Right. It's not a personal thing for you. It's, it's the fact that you thought that it would be.

04:00I mean, I'm going to make it personal because if you are disrespecting the Federal Reserve for eight

04:06years with the record that Kevin Warsh had about wanting to raise rates during the crisis and even

04:12after that, and all of a sudden you're put in by the, by Trump, who has been trying to take

04:17over

04:18the Federal Reserve by shifting people. And now Jerome Powell has to be a voting member because of

04:24this, because as a takeover, it's your guy. Yeah, that's, that's a problem because I don't think

04:29the Fed can coherently work because you have people now in a defensive mechanism to defend the

04:35institution against a leader that they, they deem to be put in the presidents who run the show.

04:41So that's conflict. We don't need that at the Federal Reserve. There's already enough drama anyway,

04:46but Trump lost his, you know, chessboard when, when, when Powell stayed and Christopher Waller went

04:57hawkish, he doesn't have enough votes for rate cuts. So for now, Kevin Warsh,

05:05should sound somewhat, you know, like a leader should, and try to take back the, the, the talking

05:13narrative from Beth Hammock, because to me, the markets run off Beth Hammock's kind of theme.

05:19So he should be like, listen, I, I trust the PC inflation data and we're, we're keeping an eye on

05:26this and we were not going to let inflation and not kind of get off key, keep it very simple

05:31and short

05:33and move on until you get your task force. So, uh, it's, it's tough for him because I think I

05:40understand what he wants to do. He just has the wrong president to do this. Like if it was Mitt

05:45Romney, he'd be perfectly fine. I mean, people don't know Kevin Warsh is a free trader. He hates

05:50tariffs. He hates government spending, you know, uh, the conflict in the middle. I mean, all the things

05:55that Trump is doing, Kevin Warsh would be against, but he's, he's only there for, for Trump put him

06:02there. So it's complicated. I mean, there's no, there's no easy thing here. You know, nobody,

06:08nobody trusts him. Nobody believes him. The markets are, you know, so I, I think it's more Beth Hammock's

06:14show right now, uh, going out, but he's got to stay somewhat firm and not let, you know, Kevin was

06:21fine up until like the last, like two minutes of this talk last time. And then the markets just

06:26puked everything up, you know? Uh, uh, so. And what, what did he say in the last two minutes?

06:31It was just giving a sense that he's not serious here, you know? Uh, and, uh, there's limits to

06:38what you can or can't do as a federal reserve chairman, but it's the peace board. Like how many,

06:43how many voters do you have that they're going to vote against you? I think it would be a detriment

06:47to his entire career. If the fed votes to hike rates and he doesn't vote for it, that's never

06:54happened. So that that's a problem. Well, and he's in a really bad spot because of the conflict.

07:00Like if it weren't for the conflict and the tariffs, uh, he'd, he'd be able to do what he

07:05wants. That's the point. I mean, Trump, Trump did a conflict, Trump did tariffs. That's what he was,

07:10he's doing. He, this is New York bully ball. He loves tariffs. He loves, well, I mean,

07:15the, you don't take the job knowing that the guy who put you there is going to put you in

07:19this

07:19position. So, uh, there's no Steve Mnuchin or anyone else to kind of check Trump. That's the

07:25problem. The impulse is taking over and he just heads down and goes for it. And now Warsh, I mean,

07:31I kind of feel bad for him. He, what does he got to do? There's nothing he can say. Nobody

07:36trusts him,

07:37you know? I mean, so my only advice would be just sound firm. Don't say anything off key. Don't give

07:47it even inclination yet. You're off key off the feds dual mandate. Uh, um, and cause there's,

07:55there's nothing he can say that will change Trump's actions. It doesn't matter. Right? So the,

08:00the marketplace has moved past Kevin Warsh in a sense, and has gone to the Beth hammocks and the

08:06Lori Logans of the world. Uh, uh, and it's priced accordingly, uh, to a more hawkish fed when the

08:13federal reserve wanted Beth hammock and Lori Logan wanted the fed to get off the easing bias and then

08:18start putting in rate hikes. That's what happened. It's not Kevin Warsh did this. It's Beth hammock and

08:24Lori Logan. They run the show. So somehow he's got to, he's got to rile up the troops and they

08:31got to

08:31work like a team. He needs to be like a coach and get the, get the team together and, and

08:38everybody

08:38kind of works somewhat on par and not make this about Trump and Warsh and Myron and you know, all

08:46those people against the federal reserve. Cause remember we, you need four votes. Okay. So I can

08:53maybe give you a Paulson and, and, and, and, and, and Barr to give you a rate hike vote in

08:59the next

09:00meeting. I don't know. It's, it's, it's, it's tricky to think. Can Jerome Powell be the last

09:06deciding vote for this? I think that would just cause that would just cause chaos and havoc. So

09:12I'm putting him off the chessboard until there's more unanimous. Then you have Lisa Cook and Richard.

09:18I mean, he should, I don't, I don't know what he talks to Trump about. And I think that's what

09:27people just don't know. You know, Trump shouldn't be talking to the Fed chairman and all the time.

09:33But it's complicated for him. This is a very, very complicated period. And he just got to,

09:39he's got to be firm and sound somewhat that he's not Trump's

09:48you and the sound effects. You know, every time we talk about this and Lisa Cook's name comes up,

09:54I just have to give this person, I just have to give her kudos because, um, she, uh, was, you

10:01know,

10:02president Trump went after her very personally and wanted to get her fired, went after her for

10:06mortgage, did a lot of things. She stuck to her guns. Like she is, uh, seemingly very apolitical on

10:12this. What, what she, she's a, she's a dove and she's still a dove, even though the person who,

10:18who wants, you know what I mean? Like who, I don't see her making a political move when many other

10:24people would. So I, you know, I don't know Lisa Cook, obviously I don't know any of these people,

10:28but from my perspective, there's a lot of respect there that someone is like, Hey, this is what they

10:32believe in. This is what they believe no matter who's the president.

10:36Yeah. Out of all the people to choose the productivity dove that might go with Kevin

10:43Walsh tactically might not have been the best. I mean, it would make sense if he went after Beth

10:48Hammock. It would totally make sense. Beth Hammock is the hawk. Beth Hammock wants to raise rates.

10:53You can have 400,000 jobs lost in two straight jobs before Beth Hammock wants to raise rates. So

10:59do you see what we're talking about here? This is why it was hashtag anyone, but Walsh,

11:05you know, because you knew this was going to happen and Trump can't control that impulse thing

11:11he does. And there's no Mnuchin or Gary Cohen or any of those to kind of, Hey, listen, you,

11:16you do this and the conflict is lasting. So on a positive note, Austin Goolsbee, the smirk of

11:24Austin Goolsbee is not a voter, not this year, next year, I think it is, but he kind of said

11:29today, listen, the inflation data isn't bad, like that bad anymore. You know, the month to month,

11:35they look at the month to month stuff and the month to month was writing 0.5, 0.6. And

11:40that,

11:40that they're, they're hiking rates in that. So the last few months have been, have been a better,

11:46if, I mean, seriously, homies, if y'all want rate cuts or whatever, not hiking rates and the

11:52conflict, ease up on the trade wars. If you don't, then you have to take the consequences.

11:59Like there's nothing, what, what is Kevin worse supposed to do? You know, in this situation,

12:03he can't really do much because he's bounded by the actions of a president that's doing all this

12:09stuff. So this is why it's like, it's hard for me because Kevin was a free trader, hated tariffs,

12:15hated deficit spending, you know, uh, would not like the conflict in the middle East. And now he's,

12:21he's brought in here to cut rates and now he's like, Oh boy, you know, and there, and I'm sure

12:28Kevin and, and Pulte and Bessent and Trump, everyone's trying to figure out a way to get

12:33yields lower, but it's difficult in a consumption based economy. And I always go back to what I wrote

12:42December 9th, 2016 on what is the realistic outlook to try to bring manufacturing back or produce

12:51stuff within. And there's there, it is very difficult in a two year political cycle because

12:57when inflation takes off, nobody's, no politician survives inflation. Trump's voting is, is, is low.

13:04So what's Kevin supposed to do here? Right. You know, um, so it's complicated. I think if the

13:11conflict could just end and some of the core goods, you know, non-servicing inflation data could be

13:18tame, then, you know, uh, you can, you can work around it, but for now it looks like all the

13:25Hawks

13:25want to do is just take back the insurance cuts of last year. Right. So, uh, there's, there's nothing

13:32else that say we want to do much more. So this is why I would say a lot has been

13:36priced in. We're

13:37hanging around four 60 to four 75 on the 10 year yield. Uh, but it's, it's, it's hard. It's a

13:44difficult spot for Warsh to be in. I don't envy the guy right now, what he has to do, uh,

13:51uh, Jackson

13:51home. So, you know, when, when Powell was chairman, if you're in the mortgage industry and he, he has a

13:57speech coming up, you're like, please just don't say anything that's going to make rates, you know,

14:02make the market, uh, go up because of your, um, remarks. In this case, we know that that's not,

14:09you know, that, that because Warsh wants to lower rates or, or keep them low. Like it's,

14:15it's sort of a different level of anxiety because we don't think, oh, he's going to come in hawkish

14:19and, you know, the market's going to respond. But in this scenario, what is the thing that we're all

14:24worried about? You know, if you're in the mortgage industry, is there anything he could say or,

14:28or do that you feel like could actually raise rates? I, I don't think Warsh is, is one of the

14:34key

14:35pieces. Now I understand why people think he is. I just think the market has got a way ahead of

14:41him

14:41because I think Beth hammock took over the Fed. So I don't know if Warsh can really change the

14:48trajectory of getting more hawkish. I mean, of course he could say something in the 10 year yield

14:53can overreact to the upper downside, but I think a lot of things just got priced in already. Uh, um,

15:00I mean, think about it. The conflict is still going, uh, inflation, PC inflation is still above

15:063%. You know, uh, we, we started a new trade war with Canada and the 10 year yields at four

15:1265.

15:13I think so much is already priced in that it's, it's hard for me to think that Kevin Warsh was

15:18not

15:18the leader of the Fed. Really. It's the Beth hammocks. If Beth hammock came out and said something

15:23more hawkish, I think that's more powerful than Kevin Warsh. And this is what happened when you choose

15:28not to lead in a chaotic period of time, right? I understand the logic of killing the dots. I'm

15:34all for that and everything, but you have to realize you have a president who is an agent of

15:39chaos. So you have to show a little bit more leadership at this time. What, whatever happens

15:45after Trump leaves, whoever the president is, you can go back to being a little bit more yourself,

15:52but as long as this variable is here, it's detrimental to your goals. If you're not talking

15:58and I just, I, I, that's why I don't, I don't see Warsh as a, as as important as Beth

16:03hammock and

16:04Lori Logan. Uh, I think they're, they're running shows. So I take their awards a little bit more.

16:09The bond market has taken their awards, but Kevin's the Fed chairman and he's got to, you know,

16:14say something to keep the markets that, you know, he will. But I, I, I just look at it as

16:19that if

16:20inflation really got worse, you're going to get four of those people to vote for rate hikes.

16:27And what is Kevin going to do at that point? They'll raise rates without Kevin Warsh.

16:32That's, that's not a good look. That's, that's what I'm concerned about that. Kevin gets himself

16:37stuck in a situation that he can't, he can't go with the team. And this is why we had hashtag

16:43anyone, but Warsh, but he, he's gotta, he's gotta, he's gotta do something here to kind of get the

16:49Fed, everyone on page. Uh, and if it is a rate hike, you got to go with it, man. Uh,

16:55uh, but, uh,

16:56there's just, there's this, there's this lack of trust by the markets with Warsh, but there is a

17:02trust in Beth hammock. There is a trust in Lori Logan. No one's going to trust Neil Kashkari and

17:07the smirk of Austin Goldsby, but that hammock and Lori Logan has taken in charge. That's what

17:12leadership does in this. Even if you agree or disagree, uh, they prove their worth in this

17:19situation. Uh, um, so I, I don't envy what Kevin has to do because I know he's got someone else

17:26to

17:26answer to. Uh, um, but you know, Scott Besson is going to, you know, come when September 9th comes,

17:32there's going to be more bond by, you know, maybe the conflict ends and then we can move on from

17:36this.

17:37Uh, we can go back to, okay, it's, can we get handle this trade war without things getting too,

17:42uh, uh, crazy. You can't really do anything by AI CapEx spending. I don't think that is as big as

17:50people think it is in terms of GDP. You can't say anything, but the consumption rate of American

17:55consumers are consuming goods and services. What are you going to do? So it's, it's tough. I, I, I feel

18:01for the guy cause I know what he wants to do, but he's got the big guy behind him and

18:08it's getting to

18:10September. The conflict is here and we opened up a new trade war with Canada or one of our biggest

18:14trading partners. These are things that the old Kevin Walsh would be super hawkish with, you know,

18:22would be super hawkish with Kevin Walsh would do an emergency rate hike if it was Kevin Walsh 1.0,

18:29but 2.0 tough, tough, tough, tough, tough, tough. And this is, this was always my concern with

18:38Walsh coming in because I, I, I don't trust the guy, but I mean, the markets don't trust him. And

18:45then now you bet hammocks the person. So I just, I don't think that should be the case. I think

18:49the

18:49Fed chairman needs to take the role. It needs to gain back, uh, credibility needs to get fed people

18:55on here. Uh, uh, and it doesn't do any good about, you know, Trump going after Lisa Cook,

19:01a voting member, you know, uh, it didn't go put, put in Stephen Meyer and, you know,

19:07this was a takeover. This was a try to attempt to take over the federal reserve. Uh, uh, and, uh,

19:13there's consequences if people don't bend the knee, you know, and now Powell's a voting member and

19:20Cook is still there. And, you know, I, I, we're, we're getting, we're, we're doing the chess pieces

19:27on who would, who would vote for a rate. I could, I could get you maybe two more fed people.

19:31I'm

19:32pretty sure what would go for a fed rate hike, but I don't know. Waller Cook, Jefferson. I'm not

19:37sure. I don't think Powell wants to inject himself as the, as the final vote. So this is where we're

19:43at. So it'll be, I want to see how Kevin wants to step up out here. You gotta be your

19:48own man,

19:48Kevin, homie. You just got to step up and, and, and, and, and lead the show. Take it back. Don't

19:54let

19:55bet hammock run the federal reserve. All right. Well, we will see what happens tomorrow in Jackson

20:00hole. Uh, well today, by the time this comes out. Um, and if it's a nothing burger or if it

20:05moves

20:05markets or if we have, um, hammock or other people come on and, and those comments, um, you know,

20:12I want to be hashtag team Kevin Warsh, but I need him to lead, right? I need him to lead.

20:18You're a fed

20:19chairman, right? You took an oath for this. This is not Donald Trump's. Hey, listen, I need

20:24rates to go lower because the interest on the debt payments or, you know, it, my polling

20:29is not good because rates are going, you, you got it. You, you took this job. That oath

20:33is yours, right? You got to step up and this is the time to do it, but do not let

20:39Beth hammock

20:40run the federal reserve by her stances out there.

20:43Cause she's a hot Logan motor shami wise words. Good advice from, from, uh, our lead analyst

20:49there. Um, we are out of time, but we will talk again soon. Thank you so much.

20:53Pleasure.

21:01Pleasure.

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