BNY’s Americas Macro Strategist John Velis discusses how Federal Reserve (Fed) balance sheet reduction is moving up the agenda, with officials like Kevin Warsh and Stephen Miran favoring a smaller footprint achieved mainly via lower reserves. The piece also outlines BNY’s macro view that the Fed will cut rates in H2 2026, contingent on a cooling Middle East conflict, easing input prices and a weaker US labor market. [...]