BlockBeats News, January 30th. Kevin Wash, nominated by Trump to be the next Federal Reserve chair, published an article titled “Fed Leadership Crisis” in The Wall Street Journal on November 16, 2025. The article pointed out that despite the United States seizing a great economic opportunity with AI innovation and the Trump administration’s pro-growth policies, the Fed’s ossified leadership is becoming a major obstacle to Americans’ higher income and purchasing power.
Kevin Wash believes 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, private capital investment in the U.S. has exceeded $54 trillion this year (2025).
On the other hand, Wash criticized the Fed’s leadership for being “slow to act” and falling into what Milton Friedman called the “tyranny of the status quo.” He pointed out:
· The Fed should abandon its pessimistic predictions for the next few years of “stagflation” (poor growth and inflation above target by 40%).
· The Fed’s bloated balance sheet (designed to support large companies during past crises) should have been significantly reduced and the funds redeployed to households and small to medium-sized enterprises.
· The Fed needs to take responsibility for the bank deposit run event at the beginning of 2022-2023. Its regulatory rules have systematically disadvantaged small and medium-sized banks, slowing the flow of credit to the real economy.
· Under Yellen and Powell’s leadership, the Fed has spent over a decade trying to bind U.S. banks to the complex global regulatory rules of Basel, Switzerland. Wash 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 place for global banks to operate.
Therefore, Wash proposes four changes the Fed should make:
1. Adjust Predictions: Abandon stagflation predictions and recognize that AI will drive real wage growth and an improvement in living standards.
2. Correct Inflation Perception: Acknowledge that inflation stems from fiscal and monetary overissuance, not economic growth.
3. Reduce the Balance Sheet and Redeploy Funds: Shrink the balance sheet and redirect resources to households and small to medium-sized enterprises.
4. Reform Regulatory Framework: Support relaxing overregulation of small banks to stimulate domestic credit growth.
