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Why Hassett Fell Behind
- Kevin Hassett lost support because investors feared he was too close to Trump and might threaten Fed independence.
- A DOJ probe into Powell triggered a backlash that made senators wary of overt White House influence on the Fed.
Balance Sheet Seen As Mission Creep
- Warsh criticizes the Fed's expanded balance sheet from QE as a mission creep beyond traditional central banking.
- He wants to shrink the balance sheet and push policy away from heavy bond-buying tools.
QE Blamed For Fiscal Laxity
- Warsh argues QE enabled bigger government deficits and let politicians off the hook for fiscal discipline.
- He believes Fed bond-buying blurred the line between monetary and fiscal policy.