New core: Warsh, Druckenmiller, Bessett, and the next Federal Reserve Chairman

Note: Recently, Kevin Warsh's chances of becoming the next Federal Reserve Chairman have surged. James Thorne, Chief Market Strategist at Wellington-Altus, analyzes the possibility and significance of Warsh becoming the next Fed Chair. Compiled by Jinse Finance.

The focus of US economic policy is shifting from isolated individuals to a tightly interconnected network: Kevin Warsh, Stanley Druckenmiller, and Scott Bessent are now aligned with the Donald Trump camp. They are attempting to end a 15-year Keynesian demand-management experiment and replace it with a supply-side system based on productive capital rather than financial engineering.

This network has suddenly become crucial as the decision on the next Fed Chair becomes the focus.

For years, the strategy has been simple: fiscal stimulus coupled with extremely loose monetary policy to support demand, resulting in an economy where "the asset-rich are rich, the workers are poor"—markets soar, but productivity is weak, and wages are unequal.

Walsh and Druckenmiller were among the first to declare that this model had reached its end, arguing that quantitative easing (QE) and financial repression distorted markets and hindered real investment. Their criticism wasn't anti-market; rather, it warned that valuations cannot permanently replace capital formation. Now, Bessant offers corresponding fiscal and industrial support. Drawing on the Hamiltonian tradition, his strategy emphasizes deregulation, investment-friendly tax rules, and targeted tariffs to bring production and capital expenditures back to the U.S., allowing private capital to profit from infrastructure development in energy, manufacturing, and technology sectors, rather than relying on policy-driven exponential expansion. The government sets the rules; the private sector takes the baton. The connections between the individuals make the race for Federal Reserve Chair particularly compelling. Warsh and Druckenmiller work closely together, combining the perspective of a former Fed governor with the experience of one of the most successful macro investors of our time. Bessant also comes from the same global macro investing school, so Warsh and Bessant share not only ideological commonalities but also shared mentors, methodologies, and market experience, with Druckenmiller serving as their linchpin. Against this backdrop, Warsh's potential role as Fed Chair is crucial. He is one of the few candidates whose track record already fits the Bessant program: he is skeptical of balance sheet interventionism and expansion of authority, but realistic about managing a highly leveraged, dollar-centric system without resorting to shock therapy. A Warsh-led Federal Reserve could narrow its mandate, normalize its balance sheet over time, and still cut interest rates in a way that supports a supply-side agenda, rather than triggering a new round of financial engineering. Trump provided political cover; Bessant wielded fiscal and industrial leverage; Warsh anchored a more focused, market-oriented central bank; Druckenmiller connected the central bank and the markets. Now, do you understand why Warsh was an excellent Fed chair, why he understood and collaborated so well with Bessant, and why Druckenmiller's connections made this structure so compelling?