Kevin Warsh’s Fed criticisms make sense, but he’s got a ‘cleanest dirty shirt’ problem. Here’s the triple dilemma he faces

The debate since President Trump nominated Kevin Warsh as his next Fed Chair has centered on whether Mr. Warsh will line up with the administration’s call for lower rates. That would be easy enough. The larger question is what magic he’ll have to cut policy rates while simultaneously shrinking the Fed’s massive holdings of Treasuries–and how he’ll do both without market mayhem that threatens the Fed’s self-mandated “financial stability”? 

Businesses and households care less about the Fed’s policy rate for overnight loans.