Fed's Miran (voter) says Fed could cut balance sheet by USD 2tln without market turmoil, adds easing liquidity regulations could aid balance sheet cuts and Fed balance sheet reduction could take several years

Fed's Miran's comments suggest that the Federal Reserve is open to a significant balance sheet reduction without causing market instability. This indicates a potentially longer-term easing of monetary conditions as liquidity regulations may support this process, which could influence rate trajectories and cross-asset pricing, particularly in fixed income and forex markets.