Core Viewpoint - The Federal Reserve's meeting minutes indicate that market participants expect the balance sheet reduction to conclude in February 2026, a shift from the previous expectation of January 2026 [1] Summary by Relevant Categories Federal Reserve Actions - The New York Fed's Open Market Account (SOMA) head reported on the expectations regarding the timeline for the balance sheet reduction [1]

Core Viewpoint - The Federal Reserve's meeting minutes indicate that respondents in a market participant survey have shifted their expectations for the end date of balance sheet reduction from January 2026 to February 2026 [1] Summary by Relevant Categories - **Federal Reserve Actions** - The Federal Reserve System Open Market Account (SOMA) head reported a change in market participants' expectations regarding the timeline for balance sheet reduction [1]

Core Viewpoint - The Federal Reserve Chairman Jerome Powell indicated that there is still room for reduction in the balance sheet and believes that the current pace can be sustained for a while [1] Group 1 - The Federal Reserve's balance sheet has the potential for further contraction [1] - Powell's comments suggest a continued commitment to monetary policy adjustments [1] - The current pace of balance sheet reduction is viewed as manageable in the near term [1]

Group 1: Economic Policies - The U.S. plans to implement tariffs on Mexico and Canada as scheduled on March 4, with further tariffs on EU goods expected soon[3] - The Federal Reserve officials express concerns about inflation risks and economic growth, suggesting a cautious approach to interest rate adjustments[4] - Japan's central bank is closely monitoring U.S. policies and their potential impact on global and domestic economies[15] Group 2: Market Performance - U.S. stock indices showed mixed results, with the S&P 500 down 1.0%, while the Dow Jones increased by 1.0% and the Nasdaq fell by 3.5%[17] - The 2-year U.S. Treasury yield dropped by 20 basis points to 3.99%, and the 10-year yield fell by 18 basis points to 4.24%[21] - The dollar index rose by 0.86% to 107.56, while the euro and pound fell by 0.79% and 0.42% respectively against the dollar[25] Group 3: Economic Indicators - U.S. new home sales in January were annualized at 657,000, below the expected 680,000, marking a 10.5% month-over-month decline[6] - The PCE price index in January rose by 2.5% year-over-year, aligning with expectations, but personal consumption expenditures weakened[6] - Durable goods orders in January increased by 3.4% year-over-year, significantly higher than the previous -3.5%[8]