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Kevin Warsh Critiques Fed's Balance Sheet, Faces Challenges

2/19/2026

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Summary

Story summary

Kevin Warsh, nominated to lead the Federal Reserve, seeks a smaller central-bank balance sheet but faces liquidity needs that hinder contraction.
He criticizes the Fed's bond holdings as distorting markets and favoring Wall Street.
The Fed's quantitative tightening reduced the balance sheet from $9 trillion to $6.7 trillion, and analysts say a return to QT is unlikely.

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Story summary

Kevin Warsh, nominated to lead the Federal Reserve, seeks a smaller central-bank balance sheet but faces liquidity needs that hinder contraction.
He criticizes the Fed's bond holdings as distorting markets and favoring Wall Street.
The Fed's quantitative tightening reduced the balance sheet from $9 trillion to $6.7 trillion, and analysts say a return to QT is unlikely.