Policy & Regulation

Federal Reserve Gov. Michael Barr Thursday warned against efforts to shrink the central bank's balance sheet, saying that effort could undermine financial stability and disrupt money markets.

A report from the Federal Deposit Insurance Corp. found that business clients with large volumes of uninsured deposits fled Silicon Valley Bank, Signature Bank and First Republic at unprecedented speed, contributing to those banks' collapses.

The Senate voted 54-45 to confirm Kevin Warsh to lead the central bank. Warsh will take the reins from Jerome Powell, who said he will remain on the Federal Reserve Board.

An annual Federal Reserve survey of nearly 13,000 respondents found that households generally felt financially secure in 2025, though many cited rising prices as a lingering concern.

Kevin Warsh's nomination to the Federal Reserve chairmanship will require a second vote, which should happen this week.

The community bank trade group says crypto firms are combining stablecoin rules, Fed master account access and trust charters to replicate banking without bank rules.

Calls to replace proposed deposit insurance reforms with a revived Transaction Account Guarantee program would make the federal government's role in a bank run purely reactive. That would be a mistake.

Market watchers say that the economy as a whole is holding up under higher energy prices and do not expect a recession. Even so, observers are watching financial markets and consumer spending for signs that inflation expectations are taking hold.

The FOMC meeting will be interesting as Kevin Warsh takes the chair. KBRA Chief Strategist Van Hesser will review the meeting, the presser and the new dot plot.

Three senior officials say attackers will eventually breach bank defenses, and supervisors should plan for it — while U.S. regulators stay nearly silent.