Short Rates for Long Rates

Published on October 6, 2025 by Premium

Trump appointees appear to be pushing for lower short rates, but a couple of them are balancing this with very hawkish views on the balance sheet. With reserves dropping below $3t, the Fed is thinking about how its balance sheet will ultimately look as QT winds down. Waller and Bowman have kicked off the discussion by outlining their views on the size, composition and pace of transition. Their proposals suggest upward pressure on long rates […]

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