The Great Shift of Heaven and Earth! The “Disruption List” of the new Fed leader, Waish, has been revealed—will the macro playbooks for $BTC and $ETH be completely rewritten?

Kevin Warsh, the nominee for the next Federal Reserve Chair, is presenting a reform blueprint capable of reshaping the global financial landscape. This blueprint directly targets the current Fed system, with core proposals summarized into eight aspects: structural reforms, lower interest rates, a new understanding of inflation, significant balance sheet reduction, defending independence, narrowing responsibilities, strengthening coordination with the Treasury, and ending communication noise among policymakers.

A senior Fed official once commented that each new chair brings their own blueprint, but ultimately, economic realities determine policy directions. In the upcoming hearing, legislators will question him on these radical proposals.

Regarding systemic reform, Warsh was candid in a recent TV interview. He believes the overall framework of monetary policy has been “broken” for a long time, and today’s Fed has undergone a “fundamental transformation” since he joined in 2006. He opposes maintaining the so-called “continuity” that has led to the biggest policy mistakes in forty-five years, emphasizing that when the central bank loses credibility, continuity is worthless. His conclusion is that the Fed needs a “thorough systemic overhaul.”

On interest rates, his stance is clear: rates should be lower. He has written that the Fed’s expanded balance sheet, used to rescue large corporations, can be significantly reduced, and the space freed up should be converted into lower interest rates to benefit ordinary households and small to medium-sized businesses.

Regarding the causes of inflation, his criticism is sharper. In a speech, he attributed high inflation to a series of cognitive fallacies: the mistaken belief that price stability can be achieved automatically, over-reliance on complex models detached from reality, the misconception that monetary policy is unrelated to money supply, and shirking responsibility in the face of external shocks. He even suggests that artificial intelligence will lead to nearly all goods’ costs decreasing, and we may be at the start of a structural deflation era.

Balance sheet reduction is one of his signature proposals. He openly states that the Fed’s assets and liabilities are “trillions of dollars” larger than needed. Interestingly, he believes a smaller balance sheet could actually lead to lower interest rates.

He regards independence as the Fed’s most valuable asset. As early as 2010, he pointed out that this credibility is rooted in its anti-inflation reputation, tied to all its actions and balance sheet commitments. He emphasizes that maintaining this asset doesn’t require perfect foresight but does require absolute independence to resist political pressure, Wall Street greed, and harmful short-termism.

At the same time, he warns against blindly expanding the Fed’s powers. He believes that the more the Fed ventures outside its core responsibilities, the more it risks undermining its ability to maintain price stability and full employment, and the more politically vulnerable it becomes. This tendency toward power expansion carries survival risks.

On coordination, he envisions a new agreement between the Fed and the Treasury. Both should clearly communicate to markets about balance sheet targets and government bond issuance plans, fostering stable expectations. He stresses this isn’t about the Fed and government “wearing the same pants,” but about collaboration on key objectives and aligned messaging.

Finally, he is dissatisfied with internal communication noise at the Fed. While he appreciates Greenspan’s efforts to increase transparency, he criticizes the later “forward guidance” as insincere, creating chaotic “noise chorus.” He recommends Fed officials reduce public comments, avoid being swayed by the latest data, and believes such reactions are highly counterproductive.

These remarks outline a vision of a chairman intent on deep reforms. If implemented, these policies could profoundly impact global liquidity, interest rate centers, and asset pricing logic. For crypto markets, especially $BTC and $ETH, which are highly dependent on global liquidity and risk appetite, this could shake the macro narrative foundation. Lower interest rate environments theoretically favor risk assets, but aggressive balance sheet reduction and redefined inflation could introduce significant uncertainty. The market’s task is to reassess all of this.

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