Heritage Foundation chief economist E.J. Antoni warned on Newsmax on Saturday that a largely overlooked Federal Reserve move to resume buying securities signals a return to money creation that could drive prices higher next year, even as policymakers tout recent interest rate cuts as progress against inflation.

Antoni said on "The Count" that recent Federal Reserve actions go well beyond the widely reported interest-rate cuts and could reignite inflation pressures heading into next year.

The Federal Reserve this week lowered its benchmark overnight lending rate by a quarter point, marking the third rate cut of the year and closing out its final policy meeting of 2025.

Since beginning its rate-cutting cycle in September 2024, the central bank has reduced rates by a cumulative 1.75 percentage points. Markets responded positively, with Wall Street rallying after Fed Chair Jerome Powell ruled out any immediate need for rate hikes and officials projected only one additional cut next year.

But Antoni argued that the focus on rate cuts has obscured what he described as a more consequential shift in policy.

"I think the bigger story that has really gotten hidden in the news is the fact that just yesterday, the Fed started buying securities again, expanding its balance sheet. These are all terms that mean they're going back to printing money, and that's going to put upward pressure on prices next year. And it's going to unfortunately, it's going to counter a lot of the administration's good work on regulatory reform," he said.

"They're pro-energy policies, things that would be putting downward pressure on prices. At the end of the day, I think it's clear Powell has to go, and we need new leadership in there who actually understands monetary policy," he added.

"Well, there's no doubt Jerome Powell has been late at pretty much every step of his career as Fed chairman, going all the way back to 2019. Actually, we forget that because it happened right before COVID," Antoni said.

Antoni argued that "the Fed over-tightened money markets in 2019, and they had to do emergency rate cuts that year. Again, it was right before COVID, so we forgot it happened. But then, even after COVID, they kept rates too low for too long. Then they were too slow to raise them. And then there's a chance that now they were too slow to bring them back down."

Antoni's remarks come as central bank officials attempt to strike a balance between slowing inflation and supporting an economy showing signs of strain. Policymakers have faced stubborn price growth, a softening labor market, and an unusual number of dissenting votes within the Federal Open Market Committee over the past year.

The Fed's decision this week capped a difficult period for Powell and his colleagues, who have also faced repeated criticism from President Donald Trump over the pace and direction of monetary policy.

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