In June 2008, inflation was running hot — well above the Federal Reserve’s 2% target — as oil prices surged. But there was another problem: a subprime housing crisis fueled by toxic mortgage assets. The crisis was so severe that Wall Street investment bank Bear Stearns had collapsed just three months earlier.

Kevin Warsh, like millions of Americans, was alarmed.

Except Warsh, now President Donald Trump’s pick to lead the Federal Reserve, sounded more worried about inflation than mass layoffs.

“Inflation risks, in my view, continue to predominate as the greater risk to the economy,” Warsh, then serving on the Fed’s powerful Board of Governors, told his colleagues during the June 2008 meeting, according to transcripts.

But just months later, unemployment would skyrocket to 10% in what later became known as the Great Recession.

Even in the spring of 2009, just months after the spectacular implosion of Lehman Brothers and with millions of Americans out of work, Warsh sounded more focused on prices.

“I continue to be more worried about upside risks to inflation than downside risks,” Warsh said during the April 2009 meeting.

Warsh’s crisis-era comments raise questions about just what kind of a Fed chair he will be, if confirmed by the Senate.

While Trump has demanded lower rates — the lowest on the planet — Warsh isn’t known as a low-rates guy.

Many on Wall Street view Warsh as an inflation hawk, someone who prefers higher rates to keep a lid on prices. In fact, Warsh is considered the most hawkish of the finalists to run the Fed.

“The question is: Which Warsh do we get?” Ed Mills, Washington policy analyst at Raymond James, told CNN. “The Warsh who was an inflation hawk at the Fed? Or the one who interviewed for this job?”

Perhaps the answer is both.

In recent months, Warsh has advocated for lower rates, arguing that surging productivity and the AI boom are setting the stage for speedy growth without troublesome inflation.

Michael Feroli, chief US economist at JPMorgan Chase, told clients on Friday that his “best guess” is Warsh will make the case for rate cuts, at least for this year.

“We’d also suspect that as time goes on, his leanings will be more open to revision and perhaps reversion back to a more hawkish view,” Feroli wrote in a report, “particularly as we get past the midterms and into the last innings of a presumably lame duck administration.”

Tellingly, JPMorgan isn’t penciling in any new rate cuts. Feroli said the bank still expects the Fed will “be on hold for the rest of the year” — even with Warsh potentially at the helm.

Joe Brusuelas, chief economist at RSM, told CNN that Warsh’s 2008-2009 calls on inflation are a “red flag” and evidence that he “got the policy response wrong.” Brusuelas added of Warsh: “His first instinct is hawkish and rarely saw a potential rate hike he didn’t like.”

Of course, hindsight is 20/20. Warsh is hardly the only Fed official with comments that did not age well and he did vote in favor of the emergency steps the Bernanke-led Fed took at the time.

Still, Wall Street certainly isn’t trading like Trump tapped a low-rate dove to run the Fed.

US stocks retreated, the beaten-down US dollar rallied and the precious metals trade blew up.

Gold, which is viewed as a hedge against inflation and a loss of Fed independence, plummeted 8% on Friday. Silver, which had been on fire, crashed 25% — its worst day since 1980.

“Kevin Warsh has been a monetary policy hawk his entire career and most importantly, during a time when the labor markets fell out of bed,” Renaissance Macro Research, a Wall Street research shop, wrote in a post on X. “His dovishness today stems from convenience. The President risks getting duped.”

Trump has described Warsh as the “central casting guy that people wanted.”

Warsh’s resume — a former economist under George W. Bush, Hoover Institution fellow and lengthy experience at the Fed — makes him look like a safe pick to lead the Fed under a traditional Republican president. In an alternate universe where Mitt Romney won the White House in 2012, Warsh could’ve become Fed chair.

Stanley Druckenmiller, the billionaire investor and a mentor of Warsh, said it’s “not correct” to brand Trump’s Fed pick as “always hawkish.”

“I’ve seen him go both ways,” Druckenmiller told the Financial Times on Friday.

Warsh has gone the more dovish way of late, a “convenient shift just as he became a Fed Chair nominee,” according to Stephanie Roth, chief economist at Wolfe Research.

Warsh’s theory of the case is built in part on his long-standing criticism of the Fed’s massive balance sheet. Warsh has said the Fed can shrink its balance sheet so aggressively that it will free officials to slash rates.

However, JPMorgan’s Feroli is skeptical, cautioning that a smaller Fed balance sheet would likely lift long-term rates — driving up the same mortgage rates that Trump has been desperately trying to lower.

“The balance sheet is wonky, but the real-world implications are not,” said Mills of Raymond James. “The focus on affordability and especially mortgage rates could be completely undone by this Fed pick.”

One former Fed official who worked with Warsh is holding out hope that “the real Warsh” will stand up, eventually.

“Kevin has wanted this job for a very, very long time. He’s a slick operator, highly skilled at climbing the greasy pole,” the official told CNN on the condition of anonymity. “But this post is his life’s endeavor. Getting it now, only to prove a toadie, would be a Pyrrhic victory. The longer he’s on the job, the more independent he can be.”

Trump’s new Fed chair will likely outlast him in office. While Trump’s term in the White House ends in January 2029, the new Fed chair’s term could last through mid-2030.

And the new Fed chair could get an assist from the Supreme Court.

Justices at the high court, including conservatives, expressed skepticism during a hearing last month about Trump’s efforts to fire Fed Governor Lisa Cook.

If the Supreme Court rules against Trump, it could give Warsh even more job security in case the president has buyer’s remorse (again).

“Did Trump attempting to fire Governor Cook end up backfiring?” Mills asked. “A Supreme Court ruling reaffirming Fed independence will give Warsh more leeway not to be loyal to Trump.”

It’s a concern that appeared to be very much on Trump’s mind last month at Davos.

“Everyone that I interviewed is great,” Trump said of his Fed selection process during his speech at the World Economic Forum. “Problem is, they change once they get the job … It’s amazing how people change once they have the job. It’s too bad, sort of disloyalty, but they got to do what they think is right.”

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