CITIC Securities: The Federal Reserve may slow down the pace of balance sheet reduction around March and end this round of balance sheet reduction in the middle to third quarter of the year. According to a research report by CITIC Securities, the rapid decline in reverse repo balances and the jump in SOFR rates in recent times have raised concerns in the market about another 2019 repo market volatility in the US market. The volatility of the US repo market in 2019 is related to the shift of the Federal Reserve's monetary policy framework towards an adequate reserve requirement system after the 2008 financial crisis. The contraction of the balance sheet resulted in lower reserve requirement levels and fluctuations in non reserve liabilities, which were the underlying reasons for the volatility of the repo market. Currently, the overall liquidity of the US market is still abundant, and three liquidity indicators need to be focused on in the future. It is expected that this round of balance sheet reduction will not repeat the turbulence and liquidity crisis in the repurchase market in 2019. The Federal Reserve may slow down the pace of balance sheet reduction around March and end this round of balance sheet reduction in the middle to third quarter of the year.