[Morgan Stanley: The Federal Reserve under Warsh may intensify U.S. Treasury market volatility] Odaily Planet Daily reports that Morgan Stanley stated that the Federal Reserve, led by Kevin Warsh, could increase volatility in the U.S. Treasury market due to reduced transparency in policy communication. Since Warsh's nomination, traders have primarily focused on his stance regarding the appropriate size of the Federal Reserve's balance sheet or policy interest rates. At Morgan Stanley, strategists such as Hornbach and Tobias believe that the former governor favors a 'smaller balance sheet size,' which could steepen the yield curve by raising long-term Treasury yields relative to short-term yields. However, the firm also believes that the Federal Reserve under Warsh may change its communication approach, potentially increasing investor uncertainty, which is a critical factor. This includes reduced interaction between Federal Reserve officials and the media, especially before Federal Open Market Committee meetings, and the possible elimination of the 'dot plot' forecasts or Summary of Economic Projections. 'The likelihood of more surprises in monetary policy and reduced consensus among investors about the future path should increase realized volatility,' Hornbach and Tobias stated.