“But in the short term, “the tsunami of spending dedicated to AI development is likely inflationary rather than deflationary,” as power-hungry data centers spike demand for electricity and construction, Kelly wrote.”

“Warsh has compared the current economic situation to the Fed in 1996 and 1997 under Alan Greenspan, who held rates steady against colleagues who wanted to hike because he believed the internet would drive a productivity boom that would keep prices low.”

““I don’t think that Warsh walks in with that level of credibility,” former Fed Chair Janet Yellen said at a conference last week.”

“Sen. Elizabeth Warren... wrote in an April 15 letter to Powell, demanding documents detailing Warsh’s previous role at the Fed.”

““Since 2008, it has been well-documented that Mr. Warsh, in his role as (a) Fed Governor, failed to take seriously the risks posed by the subprime mortgage market and played a central role in helping to arrange numerous multibillion-dollar, taxpayer-funded capital infusions to financial institutions involved in the crisis,” Warren added.”

“Powell’s term as Fed chair ends May 15, though he has said he will stay on as “chairman pro tem” if a successor is not confirmed in time.”

“He also said he plans to remain on the board at least until the DOJ’s investigation is fully resolved. He could remain at the central bank through 2028.”

“Trump has threatened to fire Powell if he does not step down, while Treasury Secretary Scott Bessent has said he is confident that Warsh will be confirmed in time.”