The stakes were high for Kevin Warsh on Friday, when Donald Trump’s man on the inside addressed Jackson Hole for the first time as Fed chair.

Warsh has a multi-faceted credibility problem, which starts and ends with the fact that he accepted the role in the first place.

As I’ve been at pains to emphasize over the last several months, no one who’d take the Fed chair job having witnessed the White House’s pressure campaign against Jerome Powell and Lisa Cook deserves “the benefit of the doubt.” Everything Warsh does, says or, more aptly given his aversion to forward guidance, doesn’t say, should be viewed through that lens.

Beginning with last month’s bungled press conference, the scales fell from market participants’ eyes. Warsh may not be credible after all, his “task forces” might be red herrings and his commitment to restoring price stability might be subordinate to his relationship with Trump, with whom Warsh spoke at least three times during his first three months on the job.

Scott Bessent made the situation worse last week with his own boondoggle: An ill-advised attempt to bully the bond market with a threat of upsized Treasury buybacks. That backfired. Bessent’s gambit garnered even more criticism than Warsh’s press conference, and the buyback plan inadvertently rekindled the “debasement” trade.

As the figures above show, gold and crypto funds took in $10.5 billion between them in the week following Bessent’s buyback announcement. The $7.3 billion to gold and the $3.2 billion to crypto counted as the largest one-week inflows since October of last year.

Now it’s on Warsh to clean up this mess. Success in Jackson Hole would be a bull flattener, BofA’s Michael Hartnett said. Kevin needs to come across “credibly hawkish on inflation to anchor the short-end, and flirtatiously dovish on the long-end in support of Bessent’s buybacks,” Hartnett wrote, in this week’s installment of his popular weekly “Flow Show” series.

In the event Warsh managed to “thread the credibility needle,” risk assets would have a green light and the dollar would likely find its footing too. (Typically, risk rallies are accompanied by a soft dollar. The fact that we’re in place where the greenback needs the same thing as stocks isn’t a good thing.)

If, on the other hand, market participants decide Warsh hasn’t reclaimed the narrative and reestablished credibility, long-end US yields could “rip through the August 19 intervention levels” and the dollar could “swoon” further, Hartnett warned.