The knee-jerk reaction to Donald Trump’s choice of Kevin Warsh to replace Jerome Powell as chairman of the Federal Reserve is that the president made the toughest pick among the four finalists for the job.
Following last night’s leak that Warsh was going to be the option, risk markets (including cryptocurrencies) fell sharply, with bitcoin falling to $81,000.
“Calling Kevin as someone who is always aggressive is not correct,” Stanley Druckenmiller told the Financial Times on Friday. “I’ve seen it go both ways.”
Druckenmiller, who made billions working alongside George Soros at Quantum Fund and at his own family office, Duquesne Capital Management, is surely in a position to know. Warsh has been a partner at Duquesne since 2011.
The relationship between them has previously been described as close father-son, and the two talk and/or text more than a dozen times a day.
“I can’t think of any other individual on the planet better equipped,” Druckenmiller continued.
Where does Treasury Secretary Scott Bessent fit in?
Druckenmiller also has very close ties to Scott Bessent. It was Druckenmiller who hired Bessent at Quantum Fund more than 30 years ago, where the future US Treasury Secretary made his own billions.
“The couple [Bessent and Warsh] “embody the way Druckenmiller interprets markets and economic policy,” the Financial Times wrote in a profile about a year ago.
“I am very excited about the partnership between [Warsh] and Bessent,” Druckenmiller said today. “Having an agreement between the Treasury secretary and the chairman of the Federal Reserve is ideal.”
