Warsh: Fed Balance Sheet Shrinkage Accelerates

Kevin Warsh declared the Fed balance sheet will shrink fast after ballooning over 18 years, warning old 1978 models ignore the AI deflationary wave now cutting intelligence costs from $30 per million tokens to near zero by end-2026. This productivity boom echoes Greenspan's 1990s internet bet that delivered 2.7% output growth and 1.9% inflation, yet Microsoft, Adobe and Intuit price hikes already added 0.3 points to core PCE. Economists see minimal near-term rate impact, but markets price partial validation that could ease policy and lift risk assets including BTC.