Kevin Warsh, a staunch heir to Jay Powell as Fed chairman, spoke last Friday with a “new interest in my opinion” and launched an attack on the actions of the U.S. central bank since resigning in 2011. Too many quantitative easing measures, willing to relax and provide competition for the poor and the poor, this is the spread of the poor, he said this promise, his statement is more and more promises, his statement is passing, his misunderstanding, his misunderstanding is a false litigation that is good at adapting to the scope. That and other failures have caused the Fed to lick the wound, the care loses credibility, "to bring worse results for our citizens."

Wash said his speech was a "love letter" to the Federal Reserve. But when someone says that the world’s problems come from “within the four walls of our most important economic institutions” and calls our central bank people “the favored princes,” it should be “opprobrium” because they don’t include inflation, which doesn’t sound entirely constructive.

Of course, this is a job application. So let's criticize the speech constructively and ask what a Fed would look like by war.

Kindness, exaggeration and missing things

I have a lot of time in most of the war of criticism. Central banks need humility, should not be favored in public life, need strong supervision, and if they make mistakes, they need stable supervision. These institutions have a general trend not only in the United States, even though inflation has been reduced recently. Outside the central bank's core functions, the task spreads to its legitimacy and democracy itself. Warsh is completely right, criticizing the central bank's choice to promote group interests before controlling prices.

But we should not exaggerate these issues like Vash. When a US president bombed the war, the rules-based economic system and the world suffered a century of pandemic, it is strange that the main problem comes from within economic institutions such as the Federal Reserve.

Although the war is right, because the purpose of refusing quantitative easing is to promote greater government borrowing and stimulus, he said he said “the Fed officials “have not asked for fiscal discipline when they continue to grow and have full employment” and that he is simply wrong.” Powell repeatedly stated that U.S. fiscal policy is “on an unsustainable path…and we know we have to change that” (an example, 26 minutes and 55 seconds).

Warsh cited the Fed's concerns about environmental issues, something that undermined its legitimacy. However, the Fed is a member of the Green Financial System Network between 2020 and 2025, a precious institution with little misdemeanor and no impact on its credibility.

When financial market testing was conducted over the past two weeks, far from the Fed needed to “reduce the loss of reputation,” it has been the U.S. government, especially the president’s executive branch, whose credibility has proven to be insufficient.

Exaggeration is inevitably part of a debate and is understandable in a job application. More of what is missing. Warsh did not try to paint an analytical counterfactual, except asserting that the world would be better now if the Fed had not made all the mistakes he outlined. How much interest rates will need to rise in interest rates be higher to offset government spending and curb inflation in 2020 and 2021? Will this work? If there is no unacceptable trade-off, all the analysis shows that price increases are inevitable? Why?

No attempt was made to resolve these issues.

Hawkish heirs

So what does Warsh's Fed look like?

The first conclusion must be that this will be more hawkish. Donald Trump may not know this, but the war is about inflation. He hates it and doesn't want to be on the watch.

Secondly, its scope will be more limited. This will make the Fed stick it to its mission - welcome.

Third, this may be more transparent. Warsh conducted a demonstration review of Bank of England transparency in 2014, which has been tested by time.

Fourth, this is my assumption, which begins with the Fed of the War, will start with the certainty of his speech, but soon finds ambiguity, nuance and tradeoffs to be orderly.

What are the IMF's expectations for tariffs?

I always find it more useful to discuss what we know and how we think of uncertain events, rather than just talking about things we don’t know. Central bankers have been doing this at the IMF and the World Bank spring meetings.

People outside the United States believe that Trump’s tariffs usually represent a shock to demand, which will reduce spending and output. This seems to be the frank view of the European Central Bank, where President Christine Lagarde said the tariffs could be “disbanded “far more than inflation.” BOE Governor Andrew Bailey agreed and spoke about the “growth shock.” Japan Bank Governor Kazuo Ueda said he shared his views on the tariffs, which was a shock to business confidence. The shock of shock can be cope with, and federal officials are even more vague.

The IMF's typical work on quantifying the tariff effects last week is an enviable job. Its basic position is unjudgmentable. Tariffs will cut growth globally and increase inflation in the United States.

Fund officials made the forecast changes with chief economist Pierre-Olivier Gourinchas. They say the world economy has entered a new era, with the largest tariff collection in a century, which will "significantly affect global trade" and "global growth is rapid."

However, the most striking objection to this position comes from the IMF's own predictions, which does not fit in with these comments.

As shown in the figure below, the forecast of the quantity of U.S. imported goods is a part of U.S. GDP and increases in a real way every year. In the IMF model, tariffs are not that important. By comparison, the Tax Foundation expects U.S. imports to fall by 23%.

Of course, IMF officials told me that its forecast is a decline in commodity as part of nominal GDP. But this itself has interesting implications. If the IMF believes that the quantity of U.S. imported goods will increase under tariffs, but the value of these goods will rise at a slower rate, then the unit price of U.S. imported goods (excluding tariffs) will fall. There is evidence that although this forecast will bring the IMF into the Trump administration’s good books.

I don't want to challenge the IMF's forecast, but I don't believe the following chart shows a "new era" of global trade warnings by IMF officials.

What I've been watching and what I've been watching

Important charts

The chart below shows that customs and consumption tax revenues have increased this year due to tariffs, with the Tax Foundation being provided by Erica York.

Trump is right, with billions of dollars in revenue being in the U.S. Treasury Department, although he likes $200 million a day.

His tariff income is huge, and he is even more wrong. Some of these increases will reduce profits, thus limiting other tax revenues. Tariffs will also block imports.

Another way to expand revenue is to estimate the total number of years. Suppose that customs raised $200 billion to $300 billion over the entire year (higher than most estimates). These pale effects are irrelevant compared to U.S. personal income taxes, which will raise 2.7tn.