The most important political issue for Fed Chairman Warsh is not working with Congress or keeping President Trump happy, but working on the politics within the Fed. While not like the Volcker period, the current problem is the uptick in no (dissents) to yes votes during the last year of the Powell era. While dissent does not make the Fed ineffective, it creates more market uncertainty. A high dissent ratio indicates disagreement over policy direction, which will spill over into market thinking. Is consensus necessary? No, but it is helpful, especially if there is a change in policy direction.
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