WASHINGTON — Federal Reserve Chair Kevin Warsh is promising that financial markets and Congress will have plenty of warning before any changes are made to the central bank’s balance sheet policies.
Appearing before the U.S. House of Representatives Financial Services Committee, Warsh acknowledged that his personal views on the Fed’s sizable balance sheet are already well documented. However, he said he did not wish to get ahead of decisions that a newly formed Fed balance sheet task force will ultimately be responsible for making.
Warsh emphasized that the Fed’s balance sheet is a component of monetary policy and expressed his desire for the central bank to avoid straying into fiscal policy territory.
“I want to assure you that if there were a change in balance sheet policy, that we would preview it, explain it, debate it, and no changes in balance sheet policy would happen without good advance notice to the likes of this committee and broadly financial market,” Warsh told committee members.
The Fed chair’s remarks signal a cautious, transparent approach to any future adjustments at the nation’s central banking institution.
