Will Kevin Warsh Fix the Fed?

Markets now face a pivotal shift as Kevin Warsh is tapped to lead the Federal Reserve, raising the prospect of a gradual retreat from quantitative easing and abundant reserves. The authors argue that QE did not rescue the economy in 2008–09 and instead helped fuel the recent surge in inflation, widen inequality, and enable outsized government borrowing at artificially low rates. They contend that shrinking the Fed’s balance sheet and ending interest on excess reserves are essential for long‑term stability, even if they risk higher near‑term yields or market volatility.

In their view, failing to unwind these policies leaves investors exposed to deeper instability over time. Advisors and investors should prepare for a likely pause in rate cuts under Powell followed by renewed easing under Warsh, alongside a slow but meaningful shift toward a less interventionist Fed.