BlockBeats News, January 30th, Kevin Warsh, nominated by Trump to be the next Fed Chair, published an article titled "Fed Leadership Crisis" in The Wall Street Journal on November 16, 2025. The article points out that despite the U.S. facing a great opportunity for economic takeoff with AI innovation and the Trump administration's pro-growth policies, the Fed's ossified leadership is becoming a major obstacle to Americans gaining higher income and purchasing power.Kevin Warsh believes that the U.S. is in a favorable position for accelerated economic growth: the AI-driven productivity revolution will be a significant "deflationary force." The Trump administration's deregulation agenda is the most important since President Reagan, coupled with the stimulus of the new tax law, has driven private capital investment in the U.S. to over $54 trillion this year.On the other hand, Warsh accuses the Fed's leadership of being "lethargic," falling into what Milton Friedman called "the tyranny of the status quo." He points out:· The Fed should abandon its pessimistic forecast of "stagflation" (poor growth and inflation above the target by 40%) in the next few years.· The Fed's bloated balance sheet (designed to support large corporations during past crises) should have been significantly reduced, reallocating funds to households and small to medium-sized enterprises at lower rates.· The Fed should be held accountable for a bank deposit run in early 2022-2023. Its regulatory rules have systematically disadvantaged small and medium-sized banks, slowing credit flow to the real economy.· Under Yellen and Powell's leadership, the Fed has spent over a decade trying to tie U.S. banks to complex global regulatory rules in Basel, Switzerland. Warsh believes that "Basel's ultimate goal is not America's ultimate goal," the U.S. should establish an independent regulatory system to make the country the best operating place for global banks.As such, Warsh proposes four changes the Fed should make:1. Adjust forecasts: Abandon stagflation predictions and recognize that AI will drive real wage growth and improve living standards.2. Correct inflation understanding: Acknowledge that inflation stems from fiscal and monetary excess, not economic growth.3. Reduce the balance sheet and redeploy funds: Shrink the balance sheet and direct resources towards households and small to medium-sized enterprises.4. Reform Regulatory Framework: Support relaxation of excessive regulation on small banks to stimulate domestic credit growth.

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