The Fed's Balance Sheet Is Costly No Matter What

New Fed Chairman Kevin Warsh has committed publicly to reducing the Fed’s financial footprint and reverting its balance sheet to a sensible size. This is a worthy goal that should be paired with Congress ending the Fed’s ability to pay interest on reserves (IOR). These reforms are critical for shrinking the Fed’s footprint in financial markets and for maintaining a clear line between monetary and fiscal policy.  Read Full Article »