Odd Lots – “Lots More With Skanda Amarnath on the Risks of Kevin Warsh”

Release Date: January 30, 2026
Hosts: Joe Weisenthal, Tracy Alloway
Guest: Skanda Amarnath (Co-founder and Executive Director, Employ America)

Episode Overview

This episode centers on the implications of Kevin Warsh’s nomination as the next Federal Reserve Chair by President Trump. Hosts Joe Weisenthal and Tracy Alloway are joined by Skanda Amarnath to discuss Warsh’s track record, qualifications, policy stances, and potential risks to the Fed’s credibility and crisis management abilities under his leadership. The discussion unpacks the mixed reactions from finance professionals, the partisan undertones of Warsh’s career, and what his appointment could mean for monetary policy, with special attention to historical context and future challenges.

Key Discussion Points & Insights

1. Mixed Reaction to Kevin Warsh’s Nomination

• Diverse Opinions: The nomination has not led to a predictable left/right divide; support and skepticism come from various directions ([02:01]–[02:58]).

  • Mohamed El-Erian praised Warsh’s expertise and communication skills.
  • Jason Furman suggested he meets the bar for substance and independence.
  • Others, like Neil Dutta and Skanda Amarnath, are more apprehensive.

• Quote:

  • "Mohamed El-Erian tweeted earlier that he thinks Kevin's going to be a great Fed chair... He brings a strong mix of deep expertise, broad experience and sharp communication skills." — Tracy Alloway [02:30]

2. Warsh’s Track Record During the Financial Crisis

• Critical Review: Amarnath is skeptical based on Warsh’s Fed tenure during the 2008 crisis, where Warsh prioritized inflation over systemic risks until the crisis was full-blown, missed the early warning signs, and after the worst was over, argued for a shift away from crisis-era policies despite high unemployment ([03:22]–[05:13]).

• Quote:

  • “He was very eager to tout how well the financial system was performing even as it was descending into crisis in 2007 and 8. He was very eager to really upweight the importance of inflation... This is uncle who had his eye on, I'd say, the wrong ball at that time.” — Skanda Amarnath [05:13]

3. Partisanship and Policy Shape-Shifting

• Political Pattern: Warsh’s policy stances show a pronounced shift depending on which party controls the White House. Skanda notes that Warsh hardened against monetary easing under a Democrat but pivots to more dovish (rate-cutting) positions when Republicans, specifically Trump, are in power ([07:40]–[09:08]).

• Policy 180: Warsh reversed course on monetary policy around the time of Trump’s 2024 election victory, stoking concerns of opportunistic partisanship.

• Lack of Mea Culpa: Warsh has not publicly reckoned with his past misjudgments or demonstrated humility post-2008.

• Quote:

  • “He basically did a big 180 on what were probably considered pretty hawkish views, but actually they turned dovish the moment the election changes.” — Skanda Amarnath [08:18]

4. Critique of “Data Dependency” and Objectivity

• Skepticism Over Data: Warsh has criticized the Fed’s reliance on data and near-term forecasting, suggesting (perhaps tongue-in-cheek) that policy could rely more on “vibes” or presidential preferences ([09:57]).

• Risk to Fed Legitimacy: Moving away from data orientation risks eroding the Fed’s perceived objectivity and its ability to garner bipartisan trust, especially critical during crises ([10:05]–[13:37]).

• Quote:

  • “What do we have if we don't have data?... It's a useful language for being able to get people from different policy preferences...on something of the same page.” — Skanda Amarnath [10:22]

5. Crisis Management and Trust

• Historical Precedent: Past crises (2008, 2020) required the Fed to act as a trusted intermediary, brokering responses with buy-in from both Congress and the White House. Warsh’s positional partisanship could undermine this function ([11:55]–[13:34]).

• Quote:

  • “The Fed steps in in the crisis when they get the backing from both Congress and the White House — that may not exist.” — Skanda Amarnath [17:12]

6. Warsh’s Rise and Network

• Background: Warsh was one of the youngest-ever Fed governors, a controversial appointee with limited experience and significant family political connections (e.g., father-in-law Ronald Lauder, major GOP donor) ([15:46]–[18:13]).
• Elite Circles: Maintains a profile among influential monetary policy minds and institutions (Hoover, Wall Street Journal, etc.), often serving a conservative audience.

7. Potential Policy Impact — Implementation Haziness

• QE Criticisms: Warsh's critiques of quantitative easing (QE) and the expanded Fed balance sheet have evolved as predictions failed to pan out. His vision for fundamental monetary policy reforms is “fuzzy,” according to Skanda ([18:53]–[21:31]).
• Technical Realities: Shrinking the balance sheet may not be practical given market liquidity needs; Warsh may be forced to moderate his past assertions.

8. “Breaking Heads” and Internal Fed Dynamics

• Potential Tension: Warsh’s calls for “regime change” and “breaking some heads” at the Fed may breed awkwardness and uncertainty among staff and colleagues ([25:26]–[25:53]).

• Quote:

  • “He talked about the need for regime change at the Fed and he said that would involve, quote, breaking some heads. So I imagine the first FOMC meeting might be a little, a little awkward.” — Tracy Alloway [25:26]

• Building Credibility: Persuading other Fed governors and presidents may be difficult for someone whose views have politically shifted and whose arguments may not be rooted in data ([22:25]–[24:46]).

9. Persuasion, Independence, and the FOMC

• Comparisons to Other Contenders: Other finalists, such as Christopher Waller, have a demonstrated record of independent judgment and data-driven arguments—qualities that give them more credibility ([21:31]–[22:25]).

• Warsh’s Challenge: Without demonstrable independence or a transparent framework, Warsh may face suspicion and struggle to build consensus on the FOMC.

• Quote:

  • “One of the nice ways that you can be persuasive is being able to point to an indicator and saying I think this is going to happen in this way... Data has a way of helping keep people accountable in discussions — not always, but it's better than nothing at all.” — Skanda Amarnath [24:04]

Notable Quotes & Memorable Moments

• "He's got his eye on the wrong ball at that time." — Skanda Amarnath on Warsh’s inflation focus during the 2008 crisis [05:13]
• "He basically did a big 180... the moment the election changes." — Skanda Amarnath on Warsh’s shifting policy stances [08:18]
• "Maybe it's vibes. Maybe it's presidential preferences." — Skanda Amarnath, on what Warsh uses instead of data [09:57]
• "The Fed steps in in the crisis when they get the backing from both Congress and the White House — that may not exist." — Skanda Amarnath [17:12]
• "He said that would involve, quote, breaking some heads." — Tracy Alloway [25:26]

Timestamps for Key Segments

• Reactions to Warsh’s Nomination: [00:51]–[03:22]
• Warsh’s Track Record & 2008 Crisis: [03:22]–[07:40]
• Partisanship Accusations & Policy Flip-Flops: [07:40]–[09:08]
• Critique of Data Dependency: [09:57]–[13:37]
• Warsh’s Background and Network: [15:05]–[18:13]
• Potential for Dramatic Policy Change: [18:13]–[21:31]
• Importance of Persuasion and Internal Fed Trust: [21:31]–[24:46]
• “Breaking Heads” at the FOMC?: [25:26]–[26:03]
• What Should Warsh Be Asked?: [26:03]–[27:34]

Conclusion

The episode offers a comprehensive examination of the risks and uncertainties surrounding Kevin Warsh’s potential tenure as Fed Chair, emphasizing concerns over his crisis record, distinctly political shifts, skepticism of data-driven policy, and possible effects on the Fed’s legitimacy. Skanda Amarnath’s perspective serves as a counterweight to the more favorable assessments of Warsh, drawing attention to the challenges of building trust and navigating crises with a controversial and possibly partisan leader. The episode ends on a note of ongoing scrutiny: “This is not going to be the last time we talk about Kevin Warsh with you...” ([27:34]).