The Federal Reserve's $6.8 trillion balance sheet represents mission creep at the nation's expense, growing one-third larger than second-place JPMorgan. This expansion funds multibillion-dollar building renovations and employs hundreds of government economists, creating a false mystique of success while concentrating unprecedented power in a single agency.

Fed Gov. Michael Barr defends the central bank's size, claiming it makes banks more resilient and improves financial stability. In reality, the massive balance sheet puts government in control of bond, repo and interbank markets, blocking innovation and distorting price discovery mechanisms that should function independently.

Chairman Kevin Warsh faces resistance to reform from colleagues protecting their turf. The oversized Fed undermines market discipline and creates moral hazard. Shrinking the balance sheet would restore proper market function and prevent the central bank from dominating financial markets that require diverse participants to function efficiently.