‍#WalshSaysToCautiouslyShrinkBalanceSheet

Federal Reserve leadership talk is shifting toward a cautious approach to shrinking the central bank’s balance sheet — not a rapid unwind.
Nominee Kevin Warsh has been vocal about reducing the Fed’s large portfolio of assets built up over years of QE, arguing that smaller holdings could bring monetary policy back to basics.
However, policymakers and market analysts are stressing that any reduction is likely to be gradual and carefully managed rather than abrupt — partly to avoid renewed stress in money markets and ensure financial stability.
📌 What this means for markets:
✔ Balance sheet reduction won’t be a quick fix — it’s strategic and deliberate
✔ Central bankers are mindful of liquidity risks and market volatility
✔ A slow, cautious rollback could shape bond yields and interest rate expectations
In short — this isn’t “sell everything now.” It’s a measured shift toward normalization, with caution written into every step. 🤍📊
‍#MacroUpdate #FedPolicy #MonetaryPolicy