{"id":605121,"date":"2026-05-21T00:55:00","date_gmt":"2026-05-21T00:55:00","guid":{"rendered":"https:\/\/buglecall.org\/?p=605121"},"modified":"2026-05-21T00:55:00","modified_gmt":"2026-05-21T00:55:00","slug":"new-fed-chair-pledges-regime-change-to-fight-inflation-heres-what-that-could-mean-in-practice-3","status":"publish","type":"post","link":"https:\/\/buglecall.org\/?p=605121","title":{"rendered":"New Fed Chair Pledges ‘Regime Change’ To Fight Inflation – Here’s What That Could Mean In Practice"},"content":{"rendered":"

New Fed Chair Pledges ‘Regime Change’ To Fight Inflation – Here’s What That Could Mean In Practice<\/span><\/p>\n

\n

Authored by Kevin Stocklin via The Epoch Times<\/a> (emphasis ours),<\/em><\/p>\n

Newly confirmed Federal Reserve Chair Kevin Warsh, pledging new tactics to fight inflation, faces an uphill battle to keep rising prices in check.<\/strong><\/p>\n

<\/a><\/p>\n

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At left is former Federal Reserve Chair Jerome Powell; at right is newly confirmed Federal Reserve Chair Kevin Warsh. Courtesy of the Federal Reserve; Hoover Institution<\/em><\/figcaption><\/figure>\n

<\/p>\n

At his April 21 Senate confirmation hearing, Warsh called for \u201ca regime change in the conduct of policy\u201d at the Fed under former chair Jerome Powell, <\/strong>whose tenure saw annual inflation exceed 8 percent during the Biden administration and has failed since 2021 to keep inflation below its target.<\/p>\n

\u201cOnce you let inflation take hold in the economy, it\u2019s more expensive and harder to bring it down, and so the fatal policy error going back four or five years is still a legacy that we\u2019re dealing with,\u201d Warsh stated. \u201cHard-working Americans are no doubt feeling it.\u201d<\/p>\n

Americans are suffering as price increases outpace wages. And as of April, the inflation rate of 3.8 percent remains persistently above the 2 percent target set by the Federal Reserve.<\/p>\n

What is the new Fed chair\u2019s plan to get inflation under control?<\/strong> Analysts predict that he will bring a different approach, which will include reducing the Fed\u2019s massive $6.8 trillion bond holdings, prioritizing interest-rate actions over quantitative easing, and focusing on the money supply over other metrics.<\/p>\n

\u201cWarsh is likely going to pursue a smaller Fed balance sheet and try to use this \u2018tightening\u2019 as a bargaining chip to get the Federal Open Market Committee to lower short-term rates,\u201d Chris Whalen, investment banker and former Fed staffer, told The Epoch Times. \u201cHis comments on the disaster of quantitative easing are quite clear.\u201d<\/p>\n

The Legacy of Cheap Dollars<\/h2>\n

Except for a brief interlude during President Donald Trump\u2019s first term, the Fed has pursued a cheap-money strategy since the mortgage crisis of 2008\u201309, keeping its benchmark short-term interest rate\u2014the federal funds rate\u2014near zero, and only raising rates in 2022 when inflation was approaching double digits. Simultaneously, the Fed pursued an experimental policy called quantitative easing (QE), in which it created money to buy bonds from money-center banks, flooding the U.S. economy with dollars.<\/p>\n

Between 2008 and 2022, the Fed accumulated $8 trillion in new financial assets on its balance sheet, effectively transforming it into one of the world\u2019s largest asset managers and the largest single owner of U.S. Treasuries<\/strong>. Warsh has been an outspoken critic of quantitative easing, leading many economists to predict he will try to reverse this policy and shrink the Fed\u2019s balance sheet.<\/p>\n

During his confirmation hearing, he stated that \u201cthe Fed has an interest rate tool and a balance sheet tool \u2026 The balance sheet tool disproportionately helps those with financial assets; the interest rate tool hits the entire economy.\u201d<\/p>\n

While QE and low interest rates boosted demand in the wake of the mortgage collapse and pandemic lockdowns, they also drove up asset prices\u2014notably stocks, bonds, and houses\u2014to the benefit of wealthier Americans. Simultaneously, living standards fell for many Americans, whose dollars have lost more than 20 percent of their value over the past five years.<\/p>\n

\u201cThe primary driver of inflation is the Fed\u2019s expansion of the money supply, which the new Fed chair Kevin Warsh has addressed numerous times,\u201d Julia Cartwright, economist with the American Institute for Economic Research, told The Epoch Times.<\/p>\n

Between 2020 and 2022, the <\/strong>Fed injected approximately $6.4 trillion in new money into the economy to finance COVID stimulus payments, she said, and about 29 percent of America\u2019s entire money supply today has been created since January 2020.<\/p>\n

\u201cCompounding this, the Iran conflict has choked off the Strait of Hormuz, disrupting roughly 20 million barrels of oil per day and a fifth of global LNG trade, driving up energy, fertilizer, plastics, food, and virtually every input price across the economy,\u201d Cartwright said.<\/p>\n

Follow the Money Supply<\/h2>\n

While the Iran war and tariffs have driven up prices, Steve Hanke, professor of economics at Johns Hopkins University who served on President Ronald Reagan\u2019s Council of Economic Advisers, maintained that inflation is fundamentally a monetary phenomenon, a matter of too much money chasing too few goods.<\/p>\n

\u201cTo put the inflation genie back in the bottle, the Fed must dump the post-Keynesian economic models it relies on and start paying attention to the quantity theory of money and the money supply, broadly measured,\u201d Hanke told The Epoch Times.<\/p>\n

\u201cThe Fed should announce that it is going to target the growth rate in the money supply that is consistent with hitting its two-percent-per-year inflation target,<\/strong>\u201d he said. \u201cBased on the quantity theory of money, that would require the rate of growth in M2 to be around 6 percent per year.\u201d<\/p>\n

The M2 measurement of the money supply includes cash, bank deposits, and funds that are readily convertible to cash, such as certificates of deposit and money market funds. During America\u2019s low-inflation period, between 2008 and 2020, the annual growth rate in the money supply (M2) was 6.11 percent, Hanke said, and inflation, measured by the Consumer Price Index (CPI), averaged 1.77 percent.<\/p>\n

Indeed, Warsh has indicated that he will focus on different metrics to measure and control inflation, beyond short-term price fluctuations.<\/p>\n

\u201cWhat I\u2019m most interested in is: What is the underlying inflation rate\u2014not what is the one-time change in prices because of a change in geopolitics or change in beef,\u201d Warsh told senators at his confirmation hearing.<\/p>\n

The Power of the Supply Side<\/h2>\n

What can the Trump administration do to help the Fed fight inflation? Economists call for supply-side initiatives, such as continuing deregulation, lowering tariffs, and boosting energy supply, as well as cutting government spending.<\/p>\n

\u201cDeficit financing pressures the Fed to expand the money supply and keeps interest rates higher than necessary<\/strong>,\u201d Cartwright said.<\/p>\n

She also advocated for a hands-off approach to private industry, despite the recent stakes the Trump administration has taken in companies like Intel.<\/p>\n

\u201cIn a functioning economy, business compete primarily by bringing prices down\u2014the more competition, the lower the prices and the better off consumers are,\u201d Cartwright said. \u201cThe most persistent and under-appreciated source of higher prices is government interference in that competition through subsidies, preferential corporate deals, tariffs, and industrial policy that substitutes Washington\u2019s judgment for the market\u2019s.\u201d<\/p>\n

Lastly, economists say, politicians should let the Fed focus on fighting inflation rather than pressuring Fed officials to cut interest rates before inflation is tamed.<\/p>\n

\u201cThe best course of action for the Trump administration to take would be to go radio silent on monetary policy,\u201d Hanke said. \u201cDo what President Reagan did with [then-Fed chair] Paul Volcker: Reagan gave Volcker the monetary policy reins and left him alone.\u201d<\/p>\n<\/div>\n

Tyler Durden<\/a><\/span>
\nWed, 05\/20\/2026 – 20:55<\/span><\/p>","protected":false},"excerpt":{"rendered":"

New Fed Chair Pledges ‘Regime Change’ To Fight Inflation – Here’s What That Could Mean In Practice Authored by Kevin Stocklin via The Epoch Times (emphasis ours), Newly confirmed Federal Reserve Chair Kevin Warsh, pledging new tactics to fight inflation, faces an uphill battle to keep rising prices in check. At left is former Federal… Continue reading New Fed Chair Pledges ‘Regime Change’ To Fight Inflation – Here’s What That Could Mean In Practice<\/span><\/a><\/p>\n","protected":false},"author":1,"featured_media":605103,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"rop_custom_images_group":[],"rop_custom_messages_group":[],"rop_publish_now":"initial","rop_publish_now_accounts":[],"rop_publish_now_history":[],"rop_publish_now_status":"pending","footnotes":""},"categories":[20,23],"tags":[],"class_list":["post-605121","post","type-post","status-publish","format-standard","has-post-thumbnail","hentry","category-economic-empowerment","category-national-security","entry"],"_links":{"self":[{"href":"https:\/\/buglecall.org\/index.php?rest_route=\/wp\/v2\/posts\/605121","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/buglecall.org\/index.php?rest_route=\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/buglecall.org\/index.php?rest_route=\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/buglecall.org\/index.php?rest_route=\/wp\/v2\/users\/1"}],"replies":[{"embeddable":true,"href":"https:\/\/buglecall.org\/index.php?rest_route=%2Fwp%2Fv2%2Fcomments&post=605121"}],"version-history":[{"count":0,"href":"https:\/\/buglecall.org\/index.php?rest_route=\/wp\/v2\/posts\/605121\/revisions"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/buglecall.org\/index.php?rest_route=\/wp\/v2\/media\/605103"}],"wp:attachment":[{"href":"https:\/\/buglecall.org\/index.php?rest_route=%2Fwp%2Fv2%2Fmedia&parent=605121"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/buglecall.org\/index.php?rest_route=%2Fwp%2Fv2%2Fcategories&post=605121"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/buglecall.org\/index.php?rest_route=%2Fwp%2Fv2%2Ftags&post=605121"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}