Wasch's reform list is quite aggressive: shrinking the balance sheet + less talk, more action. Is the Federal Reserve finally returning to its technocratic roots?

The New York Times reports that Powell will step down, with Wosch taking over, and that monetary policy is entering a re-pricing phase. Wosch has proposed Federal Reserve reforms: re-evaluating inflation models, reducing the balance sheet, lowering the frequency of forward guidance, strengthening coordination with the Treasury Department, and criticizing excessive expansion of its functions and overly intrusive market intervention. During Powell’s tenure, he oversaw pandemic-era easing, a surge in inflation, and 11 rate hikes, ultimately bringing inflation down without causing a recession. The market is clearly divided over the first meeting under the new leadership: most officials are reluctant to cut rates and are even discussing further hikes, indicating that the future interest-rate path and global pricing will be affected.