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Michael Barr vs. Kevin Warsh: Federal Reserve erupts in row over balance sheet ahead of power transition
On Thursday, a day before the formal
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On Thursday, a day before the formal transfer of authority, Federal Reserve Vice Chair Michael Barr launched a sharp public critique of plans to shrink the central bank's balance sheet, effectively challenging Jerome Powell's successor, Kevin Warsh. Speaking to a group of market experts at New York University, Barr said bluntly: "Balance sheet reduction is the wrong goal, and weakening the resilience of the banking system is the wrong means." He warned that proposals to reduce the Fed's balance sheet would undermine banks' resilience,
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Jakub Novak,
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