Warsh Calls for Fed-Treasury Plan to Smooth Balance-Sheet Unwind
- In a critique at Hoover, former Fed governor urges wide reform
- Says Fed suffers from group-think, complacency, defensiveness
Kevin Warsh Says Fed Needs Fundamental Reform
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Former Federal Reserve Governor Kevin Warsh said the central bank and the U.S. Treasury Department should coordinate more closely as the Fed prepares to reduce its balance sheet.
Fed officials are planning to take their first steps toward shrinking their $4.5 trillion of bond holdings this year by trimming reinvestment on maturing Treasury and mortgage-backed securities. The timing and amounts are still under deliberation, but in minutes of the March meeting most officials said they should begin “later this year.”