Mr. Warsh has just been nominated as Fed Chairman by President Trump. If he acts on his old convictions, he will be an excellent choice, in my opinion.
He was, and apparently still is, against Quantitative Easing and expanding the Fed's role in the broader economy, ie against capital misallocation to support financial markets and to raise asset prices at the expense of productive investments. As I understand it, he is for lower interest rates AND reducing the Fed's balance sheet. I strongly support such actions, particularly the latter.
Massive doses of QE during 2008-12 and again in 2020-22 flooded the economy with liquidity and pushed all asset prices sharply higher, plus created consumer inflation. If Mr. Warsh reverts to QT we should expect all risk asset valuations to come down, from equities and metals to junk bonds, crypto and spec real estate.
Mr. Warsh is also a champion of lower interest rates. I have no problem with that as long as he reduces liquidity. The Price of money is much less important than the Quantity of money. Hopefully, he will hold firm to his convictions if/when financial markets take a dive and start begging for a bailout.
As a final note, I am no great fan of Mr. Trump, but in this case I applaud his choice.
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