Huatai Macro: Powell serves as Chairman of the Federal Reserve, may attempt to promote a policy combination of "rate cuts + balance sheet reduction"

Huatai Macro Research Report pointed out that if Kevin Warsh is appointed as the chair of the Federal Reserve, possible changes may include a shift in the Fed's policy orientation and Warsh may attempt to push for a combination of "interest rate cuts + balance sheet reduction" policy. Communication with the president may also become smoother. Unchanged, however, is the Trump administration's focus on protecting capital markets and broad liquidity, and the overall orientation of monetary policy remains loose. In the medium term, the independence of the Federal Reserve may be eroded, and the trend of the declining intrinsic value of the US dollar may not change.