Frederic Mishkin on his expectations for Fed Chairman Kevin Warsh

• Fed independence and promoting price stability are crucial roles for the central bank.
• Old-style forward guidance is problematic; the Fed should provide information about its reaction function to markets to reduce volatility.
• Shrinking the balance sheet is a challenge, and the Fed must avoid losing control over interest rates, as seen in past attempts.

Frederic Mishkin discusses his expectations for a hypothetical Fed Chairman Kevin Warsh, emphasizing the importance of Fed independence and price stability. He highlights the challenges of balance sheet reduction and advocates for a more nuanced approach to forward guidance, focusing on communicating the Fed's reaction function to data rather than unconditional promises.