The New York Times (NYT) reported that the departure of Federal Reserve (Fed) Chairman Jerome Powell and the transition to the next Kevin Warsh administration are leading to a debate within the market over an 'institutional reset' of U.S. monetary policy. The NYT explained, 'Even before taking office, Warsh has advocated for structural reforms, including a review of the Fed's inflation model, balance sheet reduction, shrinking forward guidance, and strengthening cooperation with the Treasury Department on national debt policy. He also criticized the Fed's recent excessive market intervention and mission expansion. The market is paying attention to the direction of interest rate policy and the potential changes in the Fed's independence after the launch of the Warsh administration, with some even discussing the possibility of further interest rate hikes.'
