Newly confirmed Federal Reserve Chair Kevin Warsh is promising a major course correction at the central bank after years of inflation that crushed working families and exposed the failures of Washington’s cheap-money era.
At his Senate confirmation hearing, Warsh called for “a regime change” in Fed policy after former Chair Jerome Powell’s tenure saw inflation soar above 8 percent during the Biden years and remain stubbornly above the Fed’s 2 percent target.
As of April, inflation is still running at 3.8 percent, meaning Americans continue to pay more while wages struggle to keep up. Warsh appears ready to challenge the policies that helped create this mess: endless money creation and the Fed’s massive bond-buying program known as quantitative easing. Critics say those policies inflated stocks, bonds, and housing, rewarding Wall Street and the wealthy while everyday Americans watched their savings lose value.
Economists expect Warsh to shrink the Fed’s $6.8 trillion balance sheet and focus seriously on the money supply. That matters because inflation is not magic. It is too many dollars chasing too few goods — and the Federal Reserve printed and the Washington D.C. swamp has spent far too many dollars.
But the Fed cannot fix this alone. The Trump administration can help with its continued efforts to make government more efficient, reduce bureaucratic waste, unleash American energy, reduce regulatory burdens, and let markets compete instead of picking winners and losers based on cronyism and political favors.
Sound money, limited government, and supply-side growth are the path back to affordability. President Trump has made a great decision by putting Warsh in his position at the Fed to rebuild the monetary foundation which economic stability will rest upon for generations to come.
