Organization: Powell may not be the hawkish figure the market expects from the Federal Reserve.

Evercore ISI analyst Krishna Guha believes that Kevin Warsh's reputation as an inflation hawk may be overstated. Although his nomination initially pushed up US bond yields and pushed down gold prices, Warsh should be seen more as a pragmatic conservative who can differentiate between supply-driven and demand-driven inflation, making him potentially more flexible in the current environment. Warsh has pointed out that artificial intelligence and productivity enhancements are positive supply shocks that may alleviate pressure to implement contractionary policies. He also advocates for balance sheet reduction, but is unlikely to pursue aggressively contractionary measures that could disrupt the markets. In a politically tense atmosphere, it is expected that the Federal Reserve will continue its consensus-driven approach, despite facing unusually high pressure.