Warsh’s balance-sheet gambit could push the Fed to cut rates
TL;DR
Trump’s Fed chair pick Kevin Warsh could push for rate relief by shrinking the Fed’s balance sheet, a move some economists say could amount to about 50 basis points of easing. His plan would try to offset balance-sheet tightening with lower rates, but selling assets is unlikely and inflation progress remains a constraint; Warsh will be pressed on independence at his Senate hearing, and any cuts would likely be gradual rather than swift.
Topics:businesseconomy-and-politics#balance-sheet#economy-and-politics#federal-reserve#interest-rates#quantitative-tightening#warsh
- Trump expects his Fed chair nominee to cut interest rates. Here’s how Kevin Warsh might try to do it. MarketWatch
- What Warsh should do at the Fed Financial Times
- Federal Reserve Leadership Transition: Insights from Mary Daly GuruFocus
- Dual mandate, dual headache: Why the Fed should focus on price stability Competitive Enterprise Institute
- Fed chair nominee Warsh will have ideas, economy may deliver surprises, Daly says Reuters
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