One of the sub-plots of the last twenty years has been the growth of “derangement syndromes.” It started with Bush Derangement Syndrome at the start of the century, morphed into the far more powerful Trump Derangement Syndrome, took a side trip to the other side of the Atlantic with Brexit Derangement Syndrome, and then turned into Tariff Derangement Syndrome. The basic symptoms are always the same. Some fairly minor, and probably not even very radical reforms, get reframed as an existential threat to the economy, democracy and even civilization itself. We are now seeing the latest example. Warsh Derangement Syndrome, named after the new Chairman of the Federal Reserve, Kevin Warsh – and for investors it is likely to prove the most expensive yet. 

To listen to some of the criticism, you might think that the Fed was now run by a cross between The Terminator and Chairman Mao

To listen to some of the criticism, you might think that the Fed was now run by a cross between The Terminator and Chairman Mao

The new Chair of the world’s most powerful central bank has certainly started with a flourish. Within a few weeks of taking over from the embattled Jay Powell he has embarked on a series of reforms of the way it operates. He has rolled back “forward guidance,” a policy of preparing the market in advance for changes in monetary policy. He has hinted at cutting back the number of policy meetings from eight a year to six. And he has hinted artificial intelligence may be such a transformative technology the central........

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