Warsh Call for Fed-Treasury Accord Stirs Debate in $30 Trillion Bond Market

Source: Yahoo! Finance/Bloomberg

Sun, February 8, 2026 at 3:00 PM EST


(Bloomberg) -- Kevin Warsh floated plenty of ideas for how he would run the Federal Reserve during his campaign for the job as chair. For Wall Street, few are as cryptic — or potentially consequential — as his call for a new accord with the Treasury Department.

Warsh has voiced support for overhauling the relationship between the two institutions with a new version of an agreement in 1951.

That pact had dramatically limited the Fed’s footprint in the bond market — something that’s not true today, after trillions of dollars of securities purchases during the global financial and Covid crises. So when President Donald Trump nominated 55-year-old Warsh as his next Fed chair, investors began to debate just what he intends.

Neither Warsh nor Treasury Secretary Scott Bessent has detailed what they may consider after the former Fed governor takes the helm. The nominee did say in a CNBC interview last year that an agreement could “describe plainly and with deliberation” what the Fed’s balance-sheet size would be, with the Treasury laying out its debt-issuance plans.

Read more: https://finance.yahoo.com/news/warsh-call-fed-treasury-accord-200000177.html