Federal Reserve Chair Candidate: The Fed's Time-Dependent Easing has led to systematic errors in macroeconomic policy

BlockBeats News, April 28th: Kevin Warsh, former Federal Reserve governor and the top candidate on Wall Street to succeed current Federal Reserve Chairman Powell, published a column in The Wall Street Journal stating that "the Fed has reached the edge of its statutory and implied powers, surpassing some long-standing central bank principles and practices."

Within the government, the Fed's role in all economic policy matters has become more expansive. The Fed's all-encompassing, opportunistic expansion has led to systemic errors in macroeconomic policy.

Warsh believes that monetary policymakers should avoid discussing fiscal matters. However, if the Fed chooses to overstep, it should maintain consistency in its words and actions during times of crisis and prosperity. The maintenance of the Fed's independence depends mainly on the Fed itself, but this does not mean that central bank experts should be treated like spoiled princes.

"When monetary policy outcomes are unsatisfactory, the Fed should accept rigorous questioning, strong oversight, and bear appropriate blame for mistakes. The Fed's current predicament is largely self-inflicted. To restore credibility, repair status, and most importantly, avoid delivering worse economic outcomes to citizens, a strategic reset is necessary."