JPMorgan chief U.S. economist Michael Feroli says Kevin Warsh is “all but assured” of becoming the next Fed chair in time for the June FOMC meeting after this week’s vote in the Senate Banking Committee, but argues that rate cuts anytime soon will be “an extremely tough sell,” as underscored by the three recent dissents in favor of more hawkish forward guidance. Warsh may find more success in prioritizing the funds rate over the balance sheet as a monetary policy tool, but a smaller Fed balance sheet will take time and require complementary changes to other aspects of policy, the economist added.
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