It's Mission Impossible for the New Boss of the Federal Reserve

The nomination of Kevin Warsh as successor to Jerome Powell at the head of the U.S. Federal Reserve Bank will keep the central bank where it has been up until now—under the power of Wall Street.

Published on Feb. 12, 2026

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The article discusses the nomination of Kevin Warsh as the new head of the U.S. Federal Reserve Bank. Warsh was a key figure during the 2008 financial crisis, serving as the liaison between the Fed and Wall Street and pushing for the bailout of Wall Street banks. The article argues that Warsh's appointment will keep the Fed under the influence of Wall Street, as the Trump administration's financial policy is being steered by a Wall Street faction that wants to reduce the national debt through a sharp devaluation of the dollar.

Why it matters

The current financial system has relied on an ever-growing flow of central bank liquidity into various speculative bubbles, creating a multi-quadrillion-dollar financial bubble that is already overstretched. The appointment of Warsh, who has close ties to Wall Street, raises concerns that the Fed will continue to prioritize the interests of Wall Street over the broader economy.

The details

The article states that the Wall Street faction steering the Trump administration's financial policy is proceeding with a blueprint laid out by Stephen Miran, head of the Board of Economic Advisors to the President, to bring the debt under control through a sharp devaluation of the dollar. It is expected that Warsh will cut Fed rates accordingly, from the current 3.50-3.75% down to potentially zero or negative, in order to reduce government debt service and boost exports, while Washington forces its international partners, the foremost being China, to revalue its currency. However, this can create shocks which the financial system might not be able to absorb.

  • On Dec. 20, 2025, the Dow Jones average dropped 900 points due to a quarter-point jump in Japanese bond yields.
  • On Jan. 26, 2026, the Japanese government called for snap elections to secure voters' support for a stimulus program.

The players

Kevin Warsh

The nominee to succeed Jerome Powell as the head of the U.S. Federal Reserve Bank. Warsh was a key figure during the 2008 financial crisis, serving as the liaison between the Fed and Wall Street and pushing for the bailout of Wall Street banks.

Stephen Miran

The head of the Board of Economic Advisors to the President, who has laid out a blueprint for the Trump administration's financial policy to reduce the national debt through a sharp devaluation of the dollar.

Sanae Takaichi

The Prime Minister of Japan, who announced a stimulus program shortly after taking office on Oct. 21, 2025, and then called for snap elections on Jan. 26, 2026 to secure voters' support for the program.

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What’s next

The Japanese government's stimulus program and snap elections could potentially rock the global financial system by pushing Japanese bond yields up and curbing the 'carry trade' that has been a pillar of the current financial system.

The takeaway

The appointment of Kevin Warsh, a Wall Street insider, as the new head of the Federal Reserve raises concerns that the central bank will continue to prioritize the interests of Wall Street over the broader economy, as the Trump administration pursues a policy of reducing the national debt through a sharp devaluation of the dollar, which could create shocks that the overstretched financial system may not be able to absorb.