Warsh’s Cryptic Call for Fed-Treasury Accord Rattles Bond Market

Kevin Warsh floated plenty of ideas for how he would run the Federal Reserve during his campaign for the job as chair. For Wall Street, few are as cryptic — or potentially consequential — as his call for a new accord with the Treasury Department.

Warsh has voiced support for overhauling the relationship between the two institutions with a new version of an agreement struck in 1951.

That pact had dramatically limited the Fed’s footprint in the bond market — something that’s not true today, after trillions of dollars of securities purchases during the global financial and Covid crises. So ...