Federal Reserve Chair Candidate: Speak Less, Mind Your Own Business, Tightly Control Liquidity

BlockBeats News, April 27th—In an event on Friday, widely viewed on Wall Street as the top contender to succeed current Federal Reserve Chairman Powell, former Fed Governor Kevin Warsh harshly criticized some of the Fed's practices.

Speaking at a side event during the IMF and World Bank annual meeting to a full house audience, Warsh stated that the Fed talks too much, intervenes too much in current societal issues, and does not hold lawmakers accountable for their excessive spending. Warsh advocated for the Fed to return to its traditional position—maintaining a low profile as it has done for most of the past century, refraining from extensively explaining its monetary policy and financial stabilization measures to the public.

Warsh's views seem to align with Trump's opinion that Powell has been too exposed in the media. Warsh stated on Friday: "Fed leaders would be better off avoiding frequent sharing of their latest thoughts." He added that Fed officials should not disclose their economic forecasts as it would make them "handcuffed by what they've said before."

Warsh even pointed out that the Fed should not overly rely on economic data in its decision-making, as this "data dependence" does not hold much value. He emphasized that government-published data is often lagging and subject to subsequent revisions. In his speech, Warsh did not express specific views on the outlook for inflation and interest rates but instead said that the Fed should not disclose expectations for future rate movements to the market. He said: "Central banks should readjust to working in an environment without applause, without an audience holding their breath."

According to speculation in the market and on Wall Street, he is highly likely to be nominated by President Trump to succeed Powell as Fed Chair once Powell's term ends in May next year. (Jinse Finance)