Watched Warsh's hearing. The core priorities upon taking office are threefold:


1. Abandon forward guidance. — More volatile market swings
2. Use a truncated mean model as an inflation indicator. — Faster room for rate cuts
3. Shrink the balance sheet. — Tighter liquidity transmission
As a result, short-term yields decline, long-term yields rise; the dollar weakens + liquidity tightening coexist.
Therefore, cheap assets will become even cheaper.
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