By Steven K Beckner
(MaceNews) – Former Federal Reserve Governor Kevin Warsh was sharply critical of the U.S. central bank Thursday evening— criticizing its forecasts and performance.
Warsh, who is said to be on President Trump’s short list to succeed Fed Chair Jerome Powell when his term expires in May, said that if he is chosen he would “hit the ground running” and implement “ regime change” that would provide both low inflation and strong growth.
Warsh, interviewed on the Fox News Channel, said he expects the Fed to cut rates twice more this year, but suggested that won’t be enough.
Asked about the prospect for Fed rate cuts and about what the Fed should do with rates, he replied, “I think they’ve got two more rate cuts in them, but they’ve basically told us that. That doesn’t require a lot of crystal ball. “
“They believe in not only telling the world what they’re going to do today, but what they’re going to do forever, no matter what the facts are,” Warsh continued.
“So, I think they’ve pretty much locked themselves in,” he continued. “But the question is not what they’re going to do. The real question is the results in the economy.”
Warsh went on to say,”I think Powell’s big problem is their track record. Their track record shows that they’ve been comfortable with higher prices that have been quite bad for hard working Americans the last 5-6 years.”
“So, they might say they’re going to bring inflation down, but their forecast says that inflation is going to be closer to 3% than 2% the next couple of years,” he added. “And what do households and businesses think? Households and businesses are starting to think they want higher prices. The reality is that the economy can be stronger than they’re letting on; prices can be lower, but it’s going to require regime change at the Fed.”
Warsh further criticized Fed forecasts, like IMF forecasts, as “very stagflationary.”
“They think the global economy is weakening, they think prices are moving up,” he said. “I think they’ve got that mostly wrong. I think the U.S. economy is going to be stronger in ‘25 than in ‘24 stronger again in ‘ 26.”