Kevin Wash: Inflation is a choice for the Federal Reserve, advocating for a simultaneous approach of rate cuts and balance sheet reduction.

Odaily Planet Daily reports that the probability of Kevin Warsh becoming the next Federal Reserve Chair has risen to the top in the prediction market. Deutsche Bank research notes that if Warsh is elected, he may support both interest rate cuts and balance sheet reduction (QT), but only if regulatory reforms can reduce the banking system’s demand for reserves. Warsh believes “inflation is a choice,” rooted in the Federal Reserve’s policy decisions rather than supply chains or geopolitical issues. He calls for the Fed to return to its core mission of maintaining price stability and is optimistic about productivity breakthroughs brought by AI and deregulation. Warsh served as a Federal Reserve Board member from 2006 to 2011 and has long criticized quantitative easing policies. He is currently a partner at Duquesne Family Office, a visiting scholar at the Hoover Institution, and a lecturer at Stanford Graduate School of Business. (Wall Street Journal)