Kevin Warsh proposes reducing Federal Reserve's $6 trillion asset portfolio

13 articles · Updated · The New York Times · Apr 24

Warsh, awaiting Senate confirmation as Fed chair, advocates shrinking the central bank’s holdings of government bonds and mortgage-backed securities to lessen its market influence.
He argues that a smaller balance sheet would curb inflation, reduce inequality, and restore the Fed’s independence, while allowing for lower short-term interest rates favored by President Trump.
Warsh’s plan faces skepticism due to past market volatility from similar moves, and concerns persist about potential presidential pressure and the risks of destabilizing financial markets.

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