Wall Street is keeping a close eye on Kevin Warsh at the Fed. These are the red (and green) flags they’re watching for

All eyes are on Kevin Warsh, and for good reason.Incoming Fed chairman takes over the central bank at a pivotal moment: AI is estimated to reshape the economy as we know it (for better or worse, depending on who you ask), geopolitical tensions are rising, and consumers are hollering for relief from the cost of living.There’s also the small matter of national debt—the interest on which is influenced, in part, by the U.S. Federal Reserve.The lines drawn in the sand by politicians during his Senate Banking Committee hearing were clear: There was little Warsh could do to deter Republicans from backing his nomination, there was virtually nothing he could say to convince the Democrats. Wall Street can afford to be a little more discerning: There may be aspects of Warsh’s policy stance that benefit investors, while other behavior might leave analysts feeling a little spooked. One thing’s for sure: No one’s short of opinions when it comes to the new Fed chairman. Green flag: consensus Powell staying on at the Fed presents an awkward transition for Warsh at the central bank. Warsh has been critical of the decision-making of the Fed under Powell’s leadership, and argues for a fundamentally more dovish policy stance while his predecessor has favored a wait-and-see approach. Already, members of the Federal Open Market Committee have demonstrated they’re not comfortable sending overly optimistic signals to markets. At the latest FOMC meeting, regional presidents Neel Kashkari of Minneapolis, Lorie Logan of Dallas, and Beth Hammack of Cleveland all dissented from the post-meeting statement, as they felt it suggested the next move by the group could be a cut—a signal they did not want to send. With dissent already on the rise, a green flag for analysts is a Fed chairman who can build consensus. David Doyle, head of economics at Macquarie, said his confidence in the institution would materially increase if Warsh stresses collegiality and open-min