#TrumpandFedReseve The Fed’s Crisis of Purpose: Kevin Warsh’s Stark Warning
Former Federal Reserve Governor Kevin Warsh recently issued a sharp critique of the Fed, calling it a dangerously unaccountable force in U.S. economic policy. Speaking to the Group of Thirty and the IMF on April 25, Warsh argued the Fed has strayed far from its mission of price stability and into unchecked political and fiscal territory.
He blamed the Fed for fueling reckless post-pandemic spending and failing to pull back even as the economy recovered. Warsh highlighted how the central bank's balance sheet ballooned from under $1 trillion to $7 trillion, largely due to aggressive purchases of Treasurys and mortgage-backed securities. Initially meant for crisis relief, quantitative easing (QE) became a permanent feature, giving Congress room to overspend without facing interest rate consequences.
Warsh criticized the Fed for overstepping into political domains—like climate policy—without proper authority or oversight. “The Fed has neither the expertise nor the prerogative to make political judgments,” he warned. Inflation, he said, was the direct result of the Fed abandoning its core duty.
Calling out the Fed’s use of “independence” as a shield, Warsh argued it must be earned through results—not rhetoric. His message was clear: the Federal Reserve is now a bloated, politicized institution that has lost the public trust and jeopardized economic stability. With political tides shifting and inflation dominating headlines, Warsh’s warning demands urgent attention.
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