Warsh’s Return Revives Tensions Over the Fed’s $6.6 Trillion QE Hangover

For much of the time that President Donald Trump was mulling his potential choice for the next chair of the Federal Reserve, the debate in markets swirled around whether his pick would lower interest rates as aggressively as he preferred.

Now, with his selection of former Fed Governor Kevin Warsh — an economist known as much for his fierce criticism of the central bank as his changing views on monetary policy — the debate has abruptly shifted from short-term rates to the Fed’s $6.6 trillion balance sheet and its very role in markets.