world-economy

Fed Chair Warsh Signals Gradual Approach to Shrinking Balance Sheet

Federal Reserve Chairman Kevin Warsh said the central bank will eventually reduce its bond portfolio but cautioned that any reduction will follow careful preparation and public communication. Warsh noted that inflation risks have moderated in recent weeks. He reaffirmed the Fed's commitment to returning price growth to its 2% target. The chairman has begun restructuring the central bank's advisory ranks, appointing former Bank of England Governor Mervyn King to co-chair a new communications task force and adding internal advisors as part of a broader effort to reshape the Fed's approach to economic policy. Warsh's emphasis on measured deliberation suggests the balance sheet reduction remains a longer-term objective rather than an immediate priority.