Story perspectives

Warsh Warns $6T Fed Holdings Inflate Prices, Calls for Shrink

4/25/2026

Summary

Story summary

Kevin M. Warsh, awaiting Senate confirmation as Federal Reserve (Fed) chair, says the Fed’s $6 trillion bond and MBS portfolio has fueled inflation and inequality.
He proposes a smaller Fed footprint, tighter Treasury coordination and a holdings reduction to lower rates, but warns a balance-sheet shrink could spark market volatility.
The Justice Department’s dismissal of a criminal probe cleared a major confirmation hurdle, leaving concerns about President Donald Trump’s influence.

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Story summary

Kevin M. Warsh, awaiting Senate confirmation as Federal Reserve (Fed) chair, says the Fed’s $6 trillion bond and MBS portfolio has fueled inflation and inequality.
He proposes a smaller Fed footprint, tighter Treasury coordination and a holdings reduction to lower rates, but warns a balance-sheet shrink could spark market volatility.
The Justice Department’s dismissal of a criminal probe cleared a major confirmation hurdle, leaving concerns about President Donald Trump’s influence.