Support free trade and a strong dollar! Meet Trump's Treasury Secretary's "dark horse candidate" Kevin Warsh

A dark horse emerges! The former "youngest governor" of the Federal Reserve is expected to become the next U.S. Treasury Secretary.

Wall Street Insight previously mentioned that according to U.S. media reports, key advisors to incoming President Trump will support 54-year-old Kevin Warsh for the next U.S. Treasury Secretary.

It is noteworthy that over the past decade, Warsh has been a staunch advocate of free trade and a strong dollar, warning against a significant increase in debt burdens, and supporting the Federal Reserve's "independence"—in addition to emphasizing the value of the dollar, these positions are contrary to Trump's previous statements.

Experts analyze that investors will view Warsh's nomination as a sign of stability, as he may oppose some of Trump's most extreme tariff proposals, and Trump has always valued market opinions, which increases Warsh's chances.

Bloomberg cited sources saying that Warsh has now been invited to Trump's private club Mar-a-Lago, where he will meet with the latter in the coming days.

Ivy League Background, Wall Street Roots, Former Federal Reserve Official

If three keywords summarize Warsh's resume, they would be: Ivy League background, Wall Street roots, former Federal Reserve official.

Kevin Warsh was born in 1970 and graduated from Stanford University in 1992 with a degree in public policy, majoring in economics and political science. In 1995, he obtained a Juris Doctor degree from Harvard University. After graduation, he worked at Morgan Stanley, the National Economic Council, the Federal Reserve Board, and the Stanford Graduate School of Business.

When appointed to the Federal Reserve Board, Warsh was only 35 years old. His relatively young resume caused some controversy at the time, so during his confirmation hearing on February 14, 2006, Warsh emphasized his Wall Street experience to prove himself:

"I hope my previous experience on Wall Street, particularly my nearly seven years at Morgan Stanley, will benefit the Federal Reserve's deliberations and communications."

When Trump was forming his cabinet for his first term, Warsh was a major contender for the position of Federal Reserve Chair, but then-Treasury Secretary Steven Mnuchin persuaded Trump to choose Powell for the position, and Trump has publicly expressed regret over this decision.

Reports indicate that since the election day in November, Warsh has been working with Trump's transition team, providing advice on economic policy and personnel decisions.

It is reported that Warsh's long-term goal remains to serve as the Federal Reserve Chair, which may be realized in the latter half of Trump's term.

Advocating Free Trade, Is Warsh Pushing for a "Trump 2.0" Shift?

From an economic standpoint, Warsh's candidacy for Treasury Secretary is a noteworthy development.

The reason is that while Warsh aligns with Trump on a strong dollar, he explicitly opposes protectionism, which is contrary to Trump's stance. Between 2011 and 2018, Wosh published several column articles in The Wall Street Journal, from which we can glimpse his economic views.

In 2011, Wosh explicitly mentioned in a column titled "A New Strategy for Economic Growth" that policymakers must "resist the ongoing wave of economic protectionism":

"Strong growth requires the free flow of capital, goods, and ideas. We have world-class products and services to sell to the growing middle class in emerging markets. We must make our voices heard and resist the rising tide of economic protectionism."

The article also stated that the government needs to adjust its fiscal structure to cut spending:

"The debate over the debt ceiling has made policymakers aware of a fact that citizens have long known: we must streamline our fiscal structure. Cutting spending is essential."

The 2012 column "The Retreat of Globalization" indicated that trade is the glue that connects the global economy, and the idea of free trade must be advocated:

"American leaders must find their voice to advocate for free markets, free people, and free trade. Unless we reaffirm the primary principle of achieving economic growth in a globally interconnected economy and act according to our own prescriptions, the benefits of globalization will be lost. Now is not the time for small talk and short-term solutions."

In 2016, Wosh pointed out in the column "The Blame-Thy-Neighbor Economic Excuse" that monetary stability is an important factor in promoting economic growth:

"Washington officials seem too willing to try to guide or even set the value of the dollar. The resulting volatility is a major taboo for economic growth. Monetary stability is one of the best friends of growth."

In the 2018 article "The Meaning of Bitcoin’s Volatility," Wosh explicitly stated that Trump's protectionist measures would pose a significant threat to economic growth prospects:

"Mr. Trump's mercantilist rhetoric may not just be a negotiating tactic; it also signals that new tariffs and trade restrictions will be implemented worldwide. Economic isolationism will severely damage our economic growth prospects."