WRBL WRBL 4565 : : : Secret Santa.-)

I think Kevin Warsh will be a great pick for Fed Chair. As I’ve been a long time critic of the Fed’s easy money policy both with rates and their balance sheet, I always appreciated Warsh’s hawkishness and disdain for QE. That said, in vying for this new spot he has expressed what the administration wants, lower interest rates which is fine but only if deserved. And with the balance sheet, it will be really interesting if we get any changes to the expansion in the balance sheet recently announced by the Fed with their resumption of Treasury purchases. As seen below their balance sheet has stopped shrinking and still remains huge in size. If I could ask Kevin a question, what is your ideal balance sheet size relative to GDP, what level of bank reserves is needed? Will further easing of bank regulation, also encouraged by Treasury Secretary Bessent, allow for a smaller balance sheet? I think anything that reduces the financial footprints of the Federal Reserve would be a good thing. I hope that in this new seat, the real Kevin Warsh will stand up.

ack

Hemant backed us when we were 22 : naive-eyed ; still in BITS. If you are crazy, restless, and insane. He is the one to work with. For those who get ref:- "I have never seen Hemant, work in a modest pace" :)