Warsh Nomination Triggers Policy Logic Reassessment, Fed May Shift to "Balance Sheet Reduction + Rate Cut" Combination Mode

Odaily News During Asian trading hours, U.S. Treasury yields edged lower across the board, driven by expectations related to Federal Reserve Chair nominee Kevin Warsh. Commerzbank analyst Erik Liem noted in a report that Trump's nomination of Kevin Warsh has reinforced market expectations that the Fed may not rely as heavily on balance sheet tools in the future as it has in the past. Meanwhile, the U.S. Treasury's decision to maintain stable auction sizes aligns with market expectations, although officials indicated they are still evaluating the possibility of increasing auction sizes for bills, bonds, and floating-rate notes in the future. (Jin10)