Vosh recently wrote an article criticizing the rigidity of the Federal Reserve leadership, which may become its future policy guidance.

BlockBeats News, January 30 — Kevin Waugh, who was nominated by Trump to serve as the next Federal Reserve Chair, published an article titled “The Collapse of the Federal Reserve’s Leadership” in The Wall Street Journal on November 16, 2025. The article pointed out that despite the United States currently seizing a great opportunity for an economic leap driven by artificial intelligence innovation and Trump administration’s pro-growth policies, the rigid leadership of the Federal Reserve is becoming the main obstacle preventing Americans from achieving higher income and purchasing power.

Kevin Waugh believes that the U.S. is in a favorable position for accelerated economic growth: the AI-driven productivity revolution will become a significant “deflationary force.” The Trump administration’s deregulatory agenda is the most important since President Reagan, coupled with the stimulus from the new tax law, leading to private capital investments in the U.S. exceeding $5.4 trillion this year.

On the other hand, Waugh criticizes the Federal Reserve leadership as “slow to act,” falling into what Milton Friedman called “the tyranny of the status quo.” He points out:

· The Federal Reserve should abandon pessimistic forecasts of “stagflation” (poor growth combined with inflation above target) for the coming years.

· The bloated balance sheet of the Federal Reserve (designed to support large corporations during past crises) should be significantly reduced, and funds redeployed at lower interest rates to households and small to medium-sized enterprises.

· The Federal Reserve needs to be held responsible for the bank deposit run events in early 2022-2023. Its regulatory system systematically disadvantaged small and medium banks, slowing credit flow to the real economy.

· Under the leadership of Yellen and Powell, the Federal Reserve spent over a decade trying to bind U.S. banks within the complex global Basel regulatory rules. Waugh believes, “The ultimate goal of Basel is not America’s ultimate goal,” and the U.S. should establish an independent regulatory system to make the country the best operating environment for global banks.

Based on this, Waugh proposes four changes the Federal Reserve should make:

1. Adjust forecasts: Abandon stagflation predictions and recognize that AI will drive real wage growth and improvements in living standards.

2. Correct inflation perception: Acknowledge that inflation stems from fiscal and monetary oversupply, not economic growth.

3. Reduce the balance sheet and redeploy funds: Shrink the balance sheet and direct resources toward households and small to medium enterprises.

4. Reform the regulatory framework: Support relaxing excessive regulation on small banks to stimulate domestic credit growth.