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CMB Macro: The Fed may slow down or even halt the balance sheet reduction ahead of schedule
Jinshi data, February 27th, China Merchants Macro Research believes that considering the SOFR interest rate quarter-end surge, the debt ceiling issue may cause TGAaccount to surge after declining, increase in reserve and repo market Liquidity supply and demand Fluctuation and other risk signals, the Fed may slow down or even stop shrinking its balance sheet in advance to deal with financial market Liquidity pressure. On the other hand, if the Fed increases the policy weight of inflation risk, the US financial market will once again experience Liquidity shocks, then the pro-cyclical nature of US stock capital flow will amplify market Fluctuation, further catalyzing the downward trend of the US dollar index.