CICC Research Report: Warsh's statements at the hearing have shown a tendency towards interest rate cuts.

A research report from CICC states that Federal Reserve Chairman nominee Kevin Warsh, during his hearing before the Senate Banking Committee, revealed his core policy stance of a two-pronged approach: balance sheet reduction and interest rate cuts. At the balance sheet level, he explicitly opposes normalizing quantitative easing (QE), advocating for a gradual and orderly reduction of the Fed's balance sheet size and a withdrawal from fiscal-like responsibilities, returning it to its monetary policy roots. At the interest rate level, although no explicit commitment was made, his statements already indicated a tendency towards rate cuts. Warsh's policy proposals not only represent an adjustment to the monetary issuance mechanism but also an extension of the "America First" strategy under the wave of anti-globalization into the monetary sphere. It shifts from a "global central bank" that endlessly injects liquidity globally to a new approach that firmly controls the overall money supply, focuses on domestic productivity, and emphasizes monetary sovereignty. We believe this shift means the narrative of continued dollar liquidity overload will face revision, and assets solely reliant on liquidity and benefiting from "dollar over-issuance" may come under pressure. (Jinshi)