Warsh's nomination has triggered a reassessment of policy logic, and the Federal Reserve may shift to a combination of "balance sheet reduction + interest rate cuts".

During Asian trading hours, U.S. Treasury yields fell slightly across the board, driven by expectations surrounding Federal Reserve Chair nominee Kevin Warsh. Commerzbank analyst Erik Liem noted in a report that Trump's nomination of Warsh strengthened market expectations that the Fed may not rely as heavily on balance sheet measures in the future. Meanwhile, the Treasury's decision to maintain a stable auction size was in line with market expectations, although officials stated they are still assessing the possibility of increasing the size of future auctions of notes, bonds, and floating-rate bonds. (Jinshi)