CICC Research Report: The statements at the Wash hearing have already shown a tendency toward interest rate cuts

Odaily Planet Daily reported that China Securities Research reports state that Federal Reserve Chair nominee Kevin Woorh attended a Senate Banking Committee hearing, revealing a core policy stance of “balance sheet reduction and rate cuts” running in parallel: on the asset side, he explicitly opposes normalizing quantitative easing (QE), advocating for a gradual and orderly shrinking of the Fed’s balance sheet, exiting fiscal-like responsibilities, and returning to a focus on monetary policy; on the interest rate side, although he did not make a clear commitment, his statements already show a tendency toward rate cuts.

Woorh’s policy stance is not only an adjustment to the mechanism of monetary supply but also an extension of the “America First” strategy in the face of anti-globalization trends in the monetary field, shifting from a “global central bank” that endlessly supplies liquidity worldwide to a new approach of tightly controlling the total money supply, focusing on domestic productivity, and emphasizing monetary sovereignty. We believe this shift indicates that the narrative of continuous dollar liquidity flooding will need to be revised, and assets that rely solely on liquidity-driven growth or benefit from “excessive dollar issuance” may face pressure. (Jin10)