Barclays strategists say that the transition to a smaller balance sheet will require close coordination between the central bank and the Treasury to prevent excessive market volatility. This process will lead to tighter financial conditions. Kevin Warsh, the nominee who previously called for a significant reduction in the $6.6 trillion asset portfolio, may need to offset this tightening with lower policy rates. Barclays strategists Anshul Pradhan, Samuel Earl, and Demi Hu wrote that "balance sh
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