Cato Institute: Kevin Warsh to replace Jerome Powell

The following information was released by the Cato Institute:

President Trump has nominated Kevin Warsh to be the next Chair of the Federal Reserve. Warsh is a former Fed governor, serving on the board during the 2008 financial crisis.

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In a new statement, Cato scholars Norbert Michel, Jai Kedia and Nicholas Anthony say:

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"There are some positive signs to this appointment. Warsh was one of the first members of the Board to criticize the Fed's use of quantitative easing as a permanent monetary policy tool, and he has expressed skepticism that the Fed is an all-powerful, all-knowing institution.

Still, while Warsh has spoken of the policymakers' lack of knowledge and need for humility, he has also supported the creation of a central bank digital currency, a move that would give the federal government even more control over money. And while Warsh has spoken out a fair amount about the Fed's mission creep, it will largely be up to Congress to reduce the Fed's reach.

While President Trump remains hyper fixated on interest rates, the truth is that the pick for Fed Chair has very little to do with the direction of interest rates. Hopefully, if appointed, Warsh votes for interest rate decisions apolitically and directs the Fed towards establishing rules-based monetary policy, eliminating interest payments on reserves, and drastically shrinking the size of the balance sheet."