Newly installed Federal Reserve Chair Kevin Warsh is experiencing a bout of policy reality. If you preserve the status quo, you’ll be attacked. If you challenge the status quo, you’ll be attacked even more.

Warsh knew this going in. He is upending the status quo. (RELATED: Kevin Warsh Has Defined Success. Now He Needs To Deliver It)

The headline grabber is the five task forces he’s established to review how the Fed does its job. These task forces, expected to report sometime in 2027, will examine such matters as balance sheet policy, understanding inflation, and communications.

The focus on balance sheet policy and inflation is particularly welcome. Warsh has rightly indicated a strong desire to shrink the Fed’s balance sheet substantially. It exploded with the 2008 financial crisis and again during the pandemic as quantitative easing came to the fore.

Rapidly shrinking the balance sheet will inter alia recenter monetary policy on interest rates while eliminating the suggestion that, in purchasing and holding Treasury notes and bonds beyond a necessary minimum, the Fed violates the great taboo of monetizing fiscal policy.

The emphasis on rethinking inflation is likewise welcome. Low inflation is essential to prosperity.

Warsh has been very clear about sticking to a firm 2% inflation target. Yet the Fed staff’s........

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