President Trump has selected Kevin Warsh, a former Federal Reserve governor and current Hoover Institute fellow, to replace Jerome Powell as the chair of the Federal Reserve.
While it is unclear what Warsh would actually do, assuming that he is confirmed to be the next chairman, his past criticisms of the Federal Reserve provide hope that he could bring some much-needed reforms to the organization.
Walsh was a top economic-policy staffer for President George W. Bush and was praised by former Fed Chair Ben Bernanke for his reform proposals following the 2008 collapse. But in 2011, Warsh resigned due to disagreements over the Fed’s monetary policies, particularly over Quantitative Easing, which he warned was extremely dangerous if done long term.
Quantitative Easing is when the Fed pumps tons of money into the economy to spur economic growth, when cutting interest rates is no longer effective, and dramatically expands the Fed’s balance sheet. Since 2008, Quantitative Easing has almost been the permanent policy of the Fed.
Following the 2008 collapse, the Fed’s balance sheet more than quadrupled from $1 trillion to $4.5 trillion from 2008 to 2015. The Fed went through a short period of Quantitative Tightening, shrinking it’s balance sheet by a few hundred billion dollars, but then went back to Quantitative Easing during the pandemic, where the balance sheet ballooned from $4 trillion to $9 trillion. The Fed ended the recent period of Quantitative Tightening in December 2025, with $6.5 trillion still on it’s balance sheet, meaning that the Fed will now return to its policy of pumping even more money into the market to stimulate the slowing economy.
Only time will tell if Kevin Warsh will finally move the Fed away from it’s disastrous economic policies of the past two decades, but his criticisms of the Federal Reserve provide some hope of a return to fiscal sanity.
Levi Mikula is an editorial intern at The Heartland Institute.
