Kevin Warsh can be Trump’s Paul Volcker, but he has to be Bold

The so-called affordability crisis in the United States. This term, which aptly describes the impact of the 4 long years of significant price increases under the failed Biden regime, is the most powerful talking point in American politics today. While foreign policy, the border, and debates over cultural issues such as protecting women’s sports continue to rage, the impact of high prices on middle- and working-class families remains by far the most important and powerful political issue today. President Trump has done a good job both domestically and abroad, with key actions such as the Big and Beautiful Bill, as well as his efforts to continue to deregulate important industries such as the energy sector. Still, the 47th leader of the US does not have a magic wand to make prices suddenly fall back to the more reasonable levels consumers enjoyed prior to the failed left-wing policies of Biden and the Democrats.

This is why the most important action President Trump has taken to combat inflation was likely the appointment of new Federal Reserve Chairman Kevin Warsh. Jerome Powell was a complete and total disaster. The previous head of the Central Bank was protected by the failing and corrupt media because of overt efforts to both help the Democrats and sabotage Trump. Powell’s Hail Mary attempt to influence the 2024 election with a huge and unwarranted rate cut is the best example of clear favoritism towards the left. The failed former Fed Chair was also far too aggressive in raising rates going into the 2018 midterm elections when inflation indicators remained fairly moderate. Powell tanked markets that year with his overreaction, and then proceeded to grossly underestimate inflationary pressures under Biden, infamously proclaiming that inflation was transitory. The former head of the Central Bank was reactionary for nearly his entire term, and his instincts were almost always wrong. President Trump could not get rid of the failure that was Jerome Powell soon enough.

Kevin Warsh’s era as Fed Chair is just now beginning, but the new head of the Central Bank’s recent statements make clear that there is a new sheriff in town. Warsh recently gave an important speech that was nearly completely ignored by most in the corporate media, where he proclaimed that a new era at the Federal Reserve is coming. While the new Fed Chair spoke in broad strokes, he made clear that aggressively tackling inflation and changing past Central Bank operations is coming. Indeed, while the obsession with Trump has led the national conversation around affordability to focus almost solely on the more limited fiscal policy options the government has, Warsh likely holds the key to getting prices down for multiple reasons.

The new normal of the Fed intervening and propping up markets and asset prices in general needs to end. Markets are resilient, and the role of the Central Bank is not to pick winners and losers. Indeed, part of the reason housing prices and costs across the economy remain so high is because of the constant monetization of markets and currencies by the Fed. What Warsh is likely and importantly signaling with his latest comment is that the Central Bank is going to get back to focusing on what the Fed should prioritize inflation and employment, not markets and asset prices. The new normal, which has been socialism for the rich and capitalism for the middle class and poor, needs to end. Markets do not need to be propped up by the Fed, having both winners and losers is an important part of a healthy capitalist system.

Ronald Reagan was a good President. Still, the work of Paul Volcker to get the rate of inflation to fall by nearly 10 percent in the Gipper’s first term was a critical part of why the former California Governor had a successful economic record. If Warsh is bold, he can end the new era of constant Fed intervention in markets that has been a key reason why high prices are the new norm. Indeed, while Trump has taken a number of important steps to both strengthen the economy and bring prices down, his appointment of the new Fed Chair should be the most critical action the 47th leader of the US takes to implement the kind of meaningful and necessary changes in monetary policy that should finally help bring relief to middle- and low-income families.