Warsh’s Push for a Leaner Fed Balance Sheet Faces Market Realities
TL;DR
Fed nominee Kevin Warsh advocates a smaller central-bank balance sheet, but experts warn that without broad regulatory changes and tweaks to money-market operations, shrinking it could destabilize markets because banks rely on reserves; QT has cut holdings from about $9 trillion to roughly $6.7 trillion, and any further contraction would likely require policy shifts or Treasury coordination to avoid volatility.
Topics:businesseconomy#balance-sheet#economy#federal-reserve#kevin-warsh#quantitative-tightening#regulatory-reform
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- Trump wants the Fed to cut rates. Kevin Warsh has bigger plans. Politico
- Wall Street Is Sizing Up Warsh’s Options to Shrink Fed Portfolio Bloomberg.com
- Why Trump’s Federal Reserve Pick May Surprise Him Columbia Business School
- Warsh’s war on the Fed balance sheet Financial Times
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