By Jacob Burg
Treasury Secretary Scott Bessent said on Feb. 8 that he doesn’t expect the Federal Reserve to quickly move to reduce its balance sheet, even under the potential leadership of Fed Chair nominee Kevin Warsh, a critic of the central bank’s bond purchases.
During an interview with Fox News’ “Sunday Morning Futures,” host Maria Bartiromo raised concerns about the Fed’s balance sheet, particularly after the 2008 financial crisis, when the central bank bought large quantities of government bonds and other securities to stimulate the economy and lower long-term interest rates, a practice known as quantitative easing.
The unorthodox practice resulted in the Fed more than quadrupling its balance sheet over a seven-year period to $4.5 trillion by 2015. The balance sheet rocketed up again during the COVID-19 pandemic, reaching a high of $8.97 trillion in 2022, but has mostly declined since early 2023, dropping to $6.5 trillion in December 2025.
As of last week, the Fed’s balance sheet sat at $6.6 trillion.
Bessent told Bartiromo that whatever happens to the balance sheet “will be up to the Fed in terms of what they want to do.”
“I wouldn’t expect them to do anything quickly. They’ve moved to an ample regime policy, and that does require a larger balance sheet,” he said. “I would think that they’ll probably sit back, take at least a year to decide what they want to do.”
Two months ago, the Fed started purchasing Treasury bills to grow its stock of bond holdings in an effort to bolster liquidity in the financial system and secure firm control over the target range of its interest rates.
Warsh has advocated for drastically reducing the Fed’s current holdings, arguing that they distort finances across the economy. He previously served as a Fed Board member from 2006 to 2011.
President Donald Trump has called for lower mortgage rates, but experts have said that shrinking the Fed’s balance sheet would counteract that effort and be difficult to achieve while prioritizing financial stability.
Warsh Nomination Triggers Gold, Silver Selloff
After Trump officially announced his nomination of Warsh as Fed Chairman on Jan. 30, following months of speculation, gold and silver prices endured a sharp selloff amid concerns over the central bank’s independence from the president.
Gold dropped by 16 percent from its all-time high of $5,626 per ounce to $4,700 during the end-of-week trading session. After slipping into a bear market, silver saw its largest decline in 46 years.
Some lawmakers have been hesitant toward any Fed nominee from Trump, since the president has been vocal about his displeasure with Fed Chair Jerome Powell not moving as quickly as he would like to lower interest rates.
Concerns increased after the Justice Department opened a probe into Powell, alleging that he had mismanaged the Fed’s multibillion-dollar remodel and renovation of its headquarters. Powell has denied the allegations, asserting that the investigation is not due to the renovation or his testimony to Congress in June 2025 about the status of the project.
“The threat of criminal charges is a consequence of the Federal Reserve setting interest rates based on our best assessment of what will serve the public, rather than following the preferences of the President,” Powell wrote in a statement on Jan. 11.
Bartiromo mentioned to Bessent on Feb. 8 that Sen. Thom Tillis (R-S.C.) is “pushing back” on Warsh’s nomination and has said that he will not confirm any of Trump’s nominees until the Justice Department ends its probe into Powell.
Bessent suggested that Warsh will succeed regardless, mentioning that he received 100 votes from the Senate in 2006 when President George W. Bush nominated him as a Fed Board member.
“I would say, why don’t we get the hearings underway and see where Jeanine Pirro’s investigation goes?” he said, referring to the U.S. attorney for the District of Columbia, who brought the case against Powell.
Andrew Moran and Reuters contributed to this report.
