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Caitlin Clark was a late scratch on Wednesday night.

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New Fed Chair Pledges 'Regime Change' To Fight Inflation - Here's What That Could Mean In Practice

Authored by Kevin Stocklin via The Epoch Times (emphasis ours),

Newly confirmed Federal Reserve Chair Kevin Warsh, pledging new tactics to fight inflation, faces an uphill battle to keep rising prices in check.

At left is former Federal Reserve Chair Jerome Powell; at right is newly confirmed Federal Reserve Chair Kevin Warsh. Courtesy of the Federal Reserve; Hoover Institution

At his April 21 Senate confirmation hearing, Warsh called for “a regime change in the conduct of policy” at the Fed under former chair Jerome Powell, whose tenure saw annual inflation exceed 8 percent during the Biden administration and has failed since 2021 to keep inflation below its target.

“Once you let inflation take hold in the economy, it’s more expensive and harder to bring it down, and so the fatal policy error going back four or five years is still a legacy that we’re dealing with,” Warsh stated. “Hard-working Americans are no doubt feeling it.”

Americans are suffering as price increases outpace wages. And as of April, the inflation rate of 3.8 percent remains persistently above the 2 percent target set by the Federal Reserve.

What is the new Fed chair’s plan to get inflation under control? Analysts predict that he will bring a different approach, which will include reducing the Fed’s massive $6.8 trillion bond holdings, prioritizing interest-rate actions over quantitative easing, and focusing on the money supply over other metrics.

“Warsh is likely going to pursue a smaller Fed balance sheet and try to use this ‘tightening’ as a bargaining chip to get the Federal Open Market Committee to lower short-term rates,” Chris Whalen, investment banker and former Fed staffer, told The Epoch Times. “His comments on the disaster of quantitative easing are quite clear.”

The Legacy of Cheap Dollars

Except for a brief interlude during President Donald Trump’s first term, the Fed has pursued a cheap-money strategy since the mortgage crisis of 2008–09, keeping its benchmark short-term interest rate—the federal funds rate—near zero, and only raising rates in 2022 when inflation was approaching double digits. Simultaneously, the Fed pursued an experimental policy called quantitative easing (QE), in which it created money to buy bonds from money-center banks, flooding the U.S. economy with dollars.

Between 2008 and 2022, the Fed accumulated $8 trillion in new financial assets on its balance sheet, effectively transforming it into one of the world’s largest asset managers and the largest single owner of U.S. Treasuries. Warsh has been an outspoken critic of quantitative easing, leading many economists to predict he will try to reverse this policy and shrink the Fed’s balance sheet.

During his confirmation hearing, he stated that “the Fed has an interest rate tool and a balance sheet tool … The balance sheet tool disproportionately helps those with financial assets; the interest rate tool hits the entire economy.”

While QE and low interest rates boosted demand in the wake of the mortgage collapse and pandemic lockdowns, they also drove up asset prices—notably stocks, bonds, and houses—to the benefit of wealthier Americans. Simultaneously, living standards fell for many Americans, whose dollars have lost more than 20 percent of their value over the past five years.

“The primary driver of inflation is the Fed’s expansion of the money supply, which the new Fed chair Kevin Warsh has addressed numerous times,” Julia Cartwright, economist with the American Institute for Economic Research, told The Epoch Times.

Between 2020 and 2022, the Fed injected approximately $6.4 trillion in new money into the economy to finance COVID stimulus payments, she said, and about 29 percent of America’s entire money supply today has been created since January 2020.

“Compounding this, the Iran conflict has choked off the Strait of Hormuz, disrupting roughly 20 million barrels of oil per day and a fifth of global LNG trade, driving up energy, fertilizer, plastics, food, and virtually every input price across the economy,” Cartwright said.

Follow the Money Supply

While the Iran war and tariffs have driven up prices, Steve Hanke, professor of economics at Johns Hopkins University who served on President Ronald Reagan’s Council of Economic Advisers, maintained that inflation is fundamentally a monetary phenomenon, a matter of too much money chasing too few goods.

“To put the inflation genie back in the bottle, the Fed must dump the post-Keynesian economic models it relies on and start paying attention to the quantity theory of money and the money supply, broadly measured,” Hanke told The Epoch Times.

“The Fed should announce that it is going to target the growth rate in the money supply that is consistent with hitting its two-percent-per-year inflation target,” he said. “Based on the quantity theory of money, that would require the rate of growth in M2 to be around 6 percent per year.”

The M2 measurement of the money supply includes cash, bank deposits, and funds that are readily convertible to cash, such as certificates of deposit and money market funds. During America’s low-inflation period, between 2008 and 2020, the annual growth rate in the money supply (M2) was 6.11 percent, Hanke said, and inflation, measured by the Consumer Price Index (CPI), averaged 1.77 percent.

Indeed, Warsh has indicated that he will focus on different metrics to measure and control inflation, beyond short-term price fluctuations.

“What I’m most interested in is: What is the underlying inflation rate—not what is the one-time change in prices because of a change in geopolitics or change in beef,” Warsh told senators at his confirmation hearing.

The Power of the Supply Side

What can the Trump administration do to help the Fed fight inflation? Economists call for supply-side initiatives, such as continuing deregulation, lowering tariffs, and boosting energy supply, as well as cutting government spending.

“Deficit financing pressures the Fed to expand the money supply and keeps interest rates higher than necessary,” Cartwright said.

She also advocated for a hands-off approach to private industry, despite the recent stakes the Trump administration has taken in companies like Intel.

“In a functioning economy, business compete primarily by bringing prices down—the more competition, the lower the prices and the better off consumers are,” Cartwright said. “The most persistent and under-appreciated source of higher prices is government interference in that competition through subsidies, preferential corporate deals, tariffs, and industrial policy that substitutes Washington’s judgment for the market’s.”

Lastly, economists say, politicians should let the Fed focus on fighting inflation rather than pressuring Fed officials to cut interest rates before inflation is tamed.

“The best course of action for the Trump administration to take would be to go radio silent on monetary policy,” Hanke said. “Do what President Reagan did with [then-Fed chair] Paul Volcker: Reagan gave Volcker the monetary policy reins and left him alone.”

Tyler Durden Wed, 05/20/2026 - 20:55

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Texas Democrat Wants A Prison Camp for 'American Zionists'

A San Antonio Democrat running for Congress has proposed turning a federal immigration detention facility into an internment camp for "American Zionists,” and that is only the beginning of what she has been saying out loud. Maureen Galindo, a candidate in Texas' newly redrawn 35th Congressional District, faces a Democratic primary runoff next week against former Bexar County Public Information Officer Johnny Garcia. 

Maureen Galindo

With early voting running through Friday, May 22, she has managed to make national headlines for all the wrong reasons. In an Instagram post written in the third person, Galindo declared that she'll “turn Karnes ICE Detention Center into a prison for American Zionists and former ICE officers for human trafficking." The same post described the South San Antonio facility as "a castration processing center for pedophiles, which will probably be most of the Zionists." The Karnes facility currently serves as an immigration detention center that the Trump administration has used to house migrants. 

This is not a one-off outburst. Galindo has built her campaign around the assertion that Garcia, her Democratic opponent, is a participant in a human trafficking conspiracy orchestrated by "billionaire Zionist Jews." She has vowed to put him "on trial" for treason. Her broader worldview is a litany of antisemitic tropes, including the claims that Jewish Zionists control Hollywood, the media, and local politicians.

"I think it's actually the Zionists who are putting Jewish people at the most risk," Galindo said last week, framing her remarks as ideological criticism rather than ethnic targeting. 

 Jewish community leaders in San Antonio are not buying the semantic wall she is trying to erect between her words and their plain meaning. 

The San Antonio Jewish Federation responded with a formal statement: "The JFSA strongly condemns the spread of antisemitic tropes and conspiracy theories in public discourse."

The same statement added that "Divisive and hateful rhetoric targeting the Jewish community has no place in our civic life."

The Democratic Party's mainstream has begun, however belatedly, to distance itself from Galindo. John Lira, who lost to Galindo in the earlier primary, rescinded his endorsement last week. State Rep. James Talarico, the Democratic nominee for Texas’s U.S. Senate race, told the Jewish Telegraphic Agency that he refuses to share a campaign stage with Galindo even if she wins the runoff. "This antisemitic rhetoric has no place in our politics," Talarico said. "We need leadership in both parties willing to stand up and call out hate where it rears its ugly head." It is a fine statement. 

It would land with more force if Talarico's party were not increasingly accommodating to exactly this strain of politics, because Galindo is not an anomaly; she is a symptom. 

In Maine, the presumptive Democratic Senate nominee, Graham Platner, reportedly carried a Nazi totenkopf tattoo on his chest for years, even bragging about it, before covering it up once the campaign made such imagery inconvenient. Other progressive firebrands like Zohran Mamdani, Ilhan Omar, and Pramila Jayapal have all been criticized for antisemitic posturing. The party has also done nothing to distance itself from progressive commentator Hasan Piker, who is known for making antisemitic comments.

Galindo's campaign has become a national flashpoint precisely because her positions are expressed with unusual candor. 

While antisemitism continues creeping into the Democratic mainstream under the cover of euphemisms and activist jargon, Galindo skipped the dog whistles entirely and went straight for the megaphone.

She emerged from the primary narrowly ahead of Garcia. Now, the runoff election will test whether openly antisemitic rhetoric is finally disqualifying in modern Democratic politics, or whether the party’s activist base has already normalized something that would have ended a political career not long ago.

Tyler Durden Wed, 05/20/2026 - 20:30

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