Jerome Powell knows the Fed’s balance sheet got too big—Kevin Warsh has a plan, he just has to sell it without freaking out the markets

Jerome Powell has been a friendly neighbourhood Fed Chairman to the White House, despite the criticism and insults President Trump has levelled against him. That’s because while Powell may not have yielded to pressure from the White House to lower the base rate, the Fed, under his direction, has dutifully continued to buy Treasury debt.

The central bank, as a lender to the federal government, gives Powell visibility over the nation’s fiscal trajectory, as well as the fact that government borrowing impacts the Fed’s mandate.