Known for his hawkish stance, Kevin Warsh 😱 has been nominated as the new Federal Reserve Chair. As soon as the news broke, the market went into a frenzy—gold and silver both plummeted, the dollar strengthened, and the emotional reaction was very real—funds are clearly wary of this “inflation hawk.” Those familiar with the history of the Fed are not strangers to Warsh; he has publicly criticized the Fed multiple times for excessive easing post-pandemic and for relying too heavily on quantitative easing for too long, believing that the central bank's slow response to inflation was one of the key factors leading to high inflation later on. His core stance can be summarized in one sentence: shrink the balance sheet first, then talk about cutting rates~ 😱 The Fed’s current balance sheet, which is about $6.6 trillion, is, in his view, the root cause of liquidity excess. If the “water tap” isn’t turned down first, rushing to cut rates will only reignite inflation risks. This means that once his policy approach is implemented, the pace of balance sheet reduction could accelerate again, and U.S. Treasury holdings might further decline, which is not friendly to global liquidity expectations. For risk assets, this “hawkish + balance sheet reduction” combo may cause short-term emotional shocks and long-term valuation challenges. The market’s concern is: in the era of easing, it might really be coming to an end~ #BTC #IXIC #GOLD #XAGUSD