Warsh Fails to Deliver on Key Fed Reform Amid Ballooning Balance Sheet

Fed Chair Kevin Warsh has been in office for over seven weeks, but he's yet to make progress on one of his key reforms. The reform aims to reduce the central bank's balance sheet and shift its role from an active participant in the economy to a passive observer.

Warsh was sworn in as the 17th head of the Federal Reserve on May 22, after promising a laundry list of changes. Some of these reforms have taken effect, but he's made no headway on his most vocal proposal.

The Fed's balance sheet has continued to expand, growing by $20 billion since July 1 and reaching nearly $6.725 trillion. This expansion is expected to impact the stock market, with some analysts predicting that it could lead to higher long-term borrowing costs and a decline in valuations.