Kevin Warsh signals major Federal Reserve balance sheet reduction

15 articles · Updated · The Motley Fool · Apr 28

Testifying before the Senate Banking Committee, Fed chair nominee Kevin Warsh criticized the central bank's $6.7 trillion balance sheet as of April 22, 2026.
Warsh indicated he would pursue significant balance sheet reduction if confirmed, potentially impacting lending markets and raising borrowing costs across the $31 trillion U.S. economy.
His stance marks a sharp shift from outgoing chair Jerome Powell and could trigger volatility in the Dow, S&P 500, and Nasdaq as markets adjust to anticipated policy changes.

How will the new Fed Chair's plan to shrink the balance sheet affect your mortgage rate?

Is Wall Street prepared for the volatility of a 'radical' change in Fed policy?

Could shrinking the Fed's massive balance sheet actually trigger an economic recession?

How quickly can the Fed realistically implement such a drastic change in its monetary strategy?

What does a 'radical balance sheet reduction' truly mean for the average American's wallet?

Will rising interest rates under a new Fed Chair stall the growth of the AI industry?