President Donald Trump announced Friday that he is nominating Kevin Warsh to be the next Federal Reserve chairman, replacing Jerome Powell, whose term ends in May.

Warsh worked as an aide to former President George W. Bush, who later appointed him to the board of the Federal Reserve. The youngest ever Fed governor, Warsh served in that position from 2006 to 2011. He also previously worked as a mergers and acquisitions specialist at Morgan Stanley, and during his tenure as a Fed governor, served as a liaison between the central bank and Wall Street. He helped arrange the government’s bailout of insurance giant AIG.

The most important thing we need to know about Warsh’s background is where he stands on monetary policy, inflation, and interest rates. And, the fact that he was dead wrong about the housing market in the lead-up to the 2008/2009 Financial Crisis. . .

Roughly, the Fed hawks believe that keeping inflation low and prices stable is absolutely paramount to the U.S. economy. The Fed doves, on the other hand, are more loose with monetary policy, and believe that spurring economic and job growth by lowering interest rates and making money easier to borrow should take precedent over keeping inflation low. This dove policy is known as Quantitative Easing.

In the fallout from the 2008/2009 financial crisis, Warsh had sought to keep then-Fed Chairman Ben Bernanke, a dove par excellence, at arm’s length.

In November 2010, the Fed voted on Quantitative Easing 2 to buy large amounts of treasuries, lower long-term interest rates, and re-purchase mortgage-backed securities that went bust during the housing crisis. Of course, juicing the economy by creating money out of thin air runs the risk of high inflation. Warsh voted for QE2, yet days after he wrote in The Wall Street Journal that strategy should be “necessarily limited, circumscribed and subject to regular review.” (Read more from “Who Is Trump’s Nominee To Lead One Of The Most Powerful Institutions In America?” HERE)