When Kevin Warsh was last in the running for the big seat at the Fed, there was some concern he’d set about breaking the reflexive relationship between markets and monetary policy if installed at the helm of the world’s most important institution.

Consider, for instance, Warsh’s 2016 critique of “groupthink” among central bankers. “The guild is unwise to treat financial markets as some beast to be tamed, cub to be coddled, or market to be manipulated,” he said, in remarks to the 15th annual BIS conference on June 24, 2016. “Too many policymakers appear in thrall to financial markets, and financial markets are in thrall to policymakers.”

He wasn’t speaking in nebulous generalities. Rather, Warsh was concerned about the running dialogue between monetary policy and investors wherein asset prices effectively get a “vote” on the proper course of policy, which is subject to change depending on how markets react.

In other words, Warsh’s criticism wasn’t a generic lament for the Fed’s role in inflating bubbles. He was referring specifically to a widely-discussed post-GFC dynamic wherein the policy-setting process became a collaborative effort predicated on what I’ve previously described as transparency through ambiguity.

When Warsh became a contender to replace Janet Yellen, some analysts worried that for all his experience as an insider, he was insufficiently attentive to the potential consequences of operationalizing parts of his critique, however valid that critique might be.

“In their efforts to fine tune the economy, the Fed’s usage of transparency has effectively shrunk horizons and subordinated any long-term objectives to the short-term gains of the market and in that process they continue to encourage and reward bad behavior,” former Deutsche Bank rates strategist Aleksandar Kocic wrote in 2017.

“According to Warsh, the Fed should adhere strictly to clearly defined policy rules and long-term objectives without having to consult the market about its willingness to accept them,” an approach which, when “combined with deficit spending,” Kocic suggested could cause volatility to “return with a vengeance.”

That would’ve been just fine with SocGen’s Albert Edwards, who’s a regular Bill Kilgore when it comes to the smell of burning markets. In warning that the Fed “had become the slave of the S&P,” Warsh’s views are “indeed a breath of fresh air,” Edwards said in 2016, a year or so before Donald Trump came close to selecting Warsh for the chairmanship. “I have recently seen his name mooted as a future Fed Chair, and should a vacancy arise, he would definitely be my choice,” Edwards added.

A vacancy did indeed arise, but Warsh was snubbed in favor of Jerome Powell, who quickly became a piercing thorn in Trump’s otherwise well-insulated side. Now, after what seems like a lifetime given everything that’s happened since 2018, the spot’s vacant again. This time, Warsh got the nod.

After running through Warsh’s resume — which is, of course, impressive and includes all sorts of Fed and Fed-adjacent experience — Trump said Friday morning he’s “known Kevin for a long period of time” and has “no doubt that he will go down as one of the GREAT Fed Chairmen, maybe the best.”

I — how should I put this? — I doubt that. And not because Warsh isn’t qualified and capable. He’s both, and eminently so. Markets know him, the Fed knows him and the global central banking community knows him. He knows what he’s talking about and although he’s apparently inclined to sycophancy in pursuit of power, Warsh, unlike Kevin Hassett and Stephen Miran, isn’t what I’ll call an “inherent sycophant.”

But for all his qualifications, Warsh will struggle in the role for the same reason Powell did: He’ll serve at the behest of an authoritarian. In Trump’s second coming as president, there’s no modifier in front of that label — Trump’s not an “aspiring authoritarian” anymore, he’s the genuine article.

If you don’t cut rates when and by how much Trump wants you to cut them as Fed Chair, you’ll suffer some manner of consequences and this time around, that doesn’t just mean petulant social media derision. You could be, for example, charged with mortgage fraud (formally or not), or even criminally indicted for something you didn’t do.

Any Fed Chair of Trump’s is in a no-win situation from a legacy perspective. Staying on Trump’s good side entails subjugating the Fed’s mandate to Trump’s notoriously myopic political imperatives, including and especially the maintenance of record-high stock prices. That’s the opposite of the approach Warsh advocated in 2016.

If, on the other hand, you try to do your job — which is to say you conduct policy as apolitically as can be reasonably expected of a Fed Chair (no Fed Chair’s completely apolitical) — you won’t have one for very long. A job, I mean.

Trump didn’t ultimately fire Powell, but he tried and my guess is he would’ve succeeded eventually, SCOTUS buy-in or not, had he kept at it. It was only the proximity of Powell’s expiring term as Chair which dissuaded Trump, and even that wasn’t enough to stop Bill Pulte and Pam Bondi from colluding on subpoenas for Powell.

So, no, it isn’t especially likely that Warsh will be remembered as the best Fed Chair in history. That distinction will forever go to Paul Volcker who, just months before his death in 2019, signed a letter to The Wall Street Journal declaring his “conviction that the Fed and its Chair must be permitted to act independently and in the best interests of the economy, free of short-term political pressures and, in particular, without the threat of removal or demotion of Fed leaders for political reasons.” (Volcker rolled in his grave at the attempted ouster of Lisa Cook, and then spun again when Powell was subpoenaed this month.)

He’d deny this — or who knows, maybe he wouldn’t — but Warsh has already abandoned his principles to ingratiate himself to Trump. Warsh’s television cameos last year were cringeworthy to the extent they came across as naked attempts to curry favor at The White House at the expense of his former colleagues, including Powell.

Traditionally, Warsh was pretty assiduous about guarding against inflation. He’ll need to give that up. That hawk won’t fly under Trump.

In the same 2016 BIS address cited here at the outset, Warsh chided the Fed for ignoring “its statutory medium-term policy objectives” in favor of a “myopic compulsion to keep asset prices elevated.” Later in the same speech, Warsh declared that, “We should reverse the trend that increasingly turns central banks into the general-purpose agencies of our governments.”

On Friday, Trump made Americans a promise. Warsh, he said, “will never let you down.”