How Kevin Warsh got selected

I had a post yesterday on Kevin Warsh, the new appointee for Fed Chairman. 

By way of post-script, I want to write about the process followed for his selection. What I write is gleaned from various reports in the media. 

Warsh missed out on the job nine years ago when Trump gave it to Jerome Powell instead. According to reports in the media, Trump thought Warsh looked far too young to be taken seriously.

Soon after getting elected, Trump considered Warsh for the job of Treasury Secretary, a job that was given to Scott Bessent later.

For the Fed Chairman role, Bessent drew up a list of about ten candidates. After talking to them, he reduced the short-list to four. He had detailed meetings with the four where he asked them to spell out their views on interest rates, among other matters. The President then met all the four candidates. There was one more meeting between Warsh and Trump last Thursday after which Trump decided to go ahead with the appointment.

In this entire period, all names under consideration were in the public domain. Their views and comments on a range of matters were dissected and parsed in the media. The financial markets' reaction to some of the names could be discerned. For the short-listed four, betting markets sprang up. There were reactions on Capitol Hill to some of the prominent names, such as Kevin Hassett.

Hassett's chances dimmed after the Department of Justice announced an investigation of Jerome Powell's spending on the renovation of the Fed. Angry members of the Congress made it clear they would not process Hassett's appointment until Powell's case had been settled.

To cut a long story short, the selection of the Fed Chair took place in the full glare of publicity with the reactions of the markets and prominent public figures getting factored into the final selection. We have a pretty good idea of what we might expect of various candidates. It is a process that deserves admiration.

Quite different from some name being sprung on the public one day, would you say?