The Fed’s six-trillion-dollar balance sheet question
Kevin Warsh’s drive to shrink the US central bank’s ledger is unlikely to be a simple task
“Slowly and deliberatively, I believe we need a smaller central bank balance sheet.”
That was what Kevin Warsh, nominee of the next US Federal Reserve chair, told the Senate at his confirmation hearing on April 21.
Warsh has emerged as a vocal critic of the Fed’s balance sheet policy, arguing that a large central bank ledger blurs the line between monetary and fiscal authorities and explains “why the Fed is in the business of politics”. He has said he would “find out a way” to make the balance
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