Fed Chair Warsh Accused of Gaslighting Public on Balance Sheet Reduction

What was said

"I think some of what is, you know, shrink the balance sheet, I think is a very cynical BS narrative. It's gaslighting. It's just QE done by the banks. That's it. Which is, again, it's fine. I get it. But don't pee on my back and tell me that it's raining."

Groman alleges incoming Fed Chair Kevin Warsh's balance sheet reduction plan is fundamentally dishonest, arguing deregulation will simply shift Treasury purchases from the Fed to banks with infinite leverage. He claims this regulatory arbitrage constitutes QE by another name while Warsh presents it as hawkish policy. This represents a scathing critique of the new Fed leadership's credibility before Warsh's first meeting.