What Would Make Kevin Warsh Consider a "Fed Put?"

The relationship between the Federal Reserve and financial markets is delicate. The Fed doesn't want markets to think it's worried about asset prices, but when those prices take a dive, the economy gets nervous. That tension is the backdrop for something called the "Fed put"—an informal understanding that the central bank will step in to support markets when they fall sharply. The concept dates back to Alan Greenspan's early tenure as Fed chair, specifically to October 1987, when the Dow dropped 22.5% in a single day on Black Monday. Two months into his chairmanship, Greenspan responded by helping big banks stay afloat, and the "Greenspan put" was born. The pattern repeated: the dot-com bubble burst in 2001 brought more Fed liquidity injections, the financial crisis under Bernanke produced a "Bernanke put," and the pandemic generated a "Powell put." As J. Cadia at the Cato Institute explained, the Fed's logic has been that if markets signal something that could amplify what's happening in the economy, the central bank should take it seriously. But that doesn't mean the Fed intervenes every time markets wobble. When President Trump imposed wide-scale tariffs last year, the Fed did not immediately step in to fix things. The question of what would make Kevin Warsh—or any Fed chair—consider a "Fed put" remains open, and the answe