Fed nominee Warsh's plan to limit Fed independence raises concerns over control of balance sheet and monetary policy.

Kevin Warsh, President Trump's nominee to lead the Federal Reserve, suggests a new Fed-Treasury accord that could limit the Fed's control over its balance sheet and monetary policy tools. His views on Fed independence are unclear, raising concerns among former Fed officials that such an accord might allow Treasury to influence or bypass the Fed, potentially compromising its independence. This could affect the Fed's ability to respond flexibly in crises, especially regarding asset purchases and currency swap lines. The debate continues as Warsh awaits Senate confirmation and further clarification on his proposals.