Jackson Hole Policy Simulator: The Warsh Doctrine vs Consensus Matrix

Policy Levers & Regimes

Jackson Hole Debates

Central Banking Doctrine

Policy Rate Target: 4.75%

Monthly QT Runoff Pace: $95B

Productivity Growth Trend: 1.8%

Fiscal Deficit (% GDP): 6.2%

Estimated Neutral Rate (r*): 3.25%

Warsh Thesis Insight: Persistent oversized central bank balance sheets misallocate capital and subsidize fiscal profligacy. Quantitative tightening restores the market price mechanism.

Transmission Output & Yield Surface Rule-Anchored QT

Terminal Policy Rate

4.25%

10Y-2Y Yield Spread

38 bps

5y5y Fwd Inflation

2.18%

Balance Sheet / GDP

16.4%

U.S. Sovereign Yield Curve (%) 3M to 30Y Horizon

Fed Balance Sheet Runoff Trajectory % of GDP over 3 Years

Jackson Hole Macro Framework Simulator Deterministic Live Model