Moody's Talks - Inside Economics Wurm on Warsh
Feb 2, 2026
Martin Wurm, a Moody's Analytics financial economist who covers the Federal Reserve, discusses Kevin Warsh as a potential Fed chair. They explore Warsh's inflation-first stance, his push to narrow the Fed’s toolkit, debates over QE and regulation, and whether his views would reshape Fed independence. Short takes on market reactions and productivity’s role in rate policy round out the conversation.
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Return To A Narrow Fed Mandate
- Warsh advocates a narrow central bank focused on price stability and limited QE outside crises.
- He argues large Fed intervention encourages fiscal profligacy and long-term inflation risk.
Separation Of Monetary And Regulatory Roles
- Warsh criticizes expanded Fed regulatory roles and capital rules as burdensome for smaller banks.
- He proposes separating monetary policy from bank supervision to avoid conflicting objectives.
Skepticism Of Data And Modeling
- Warsh questions data dependency and complex models, preferring simpler money-focused approaches.
- He talks about money rather than interest rates, echoing older monetarist frameworks.