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Fed’s QT Ramp-Up May Threaten Market Liquidity, Macro Strategist Tchir Says

  • Fed’s QT program to double in pace next month to $95 billion
  • The economy turned the corner” in a negative way,” Tchir says
Peter Tchir

Peter Tchir

Photographer: Christopher Goodney/Bloomberg

Runoff of the Federal Reserve’s balance sheet is set to ramp-up in the coming months, and if quantitative tightening is as impactful as quantitative easing has been in the past two years, risk assets aren’t being accounted for, according to Peter Tchir, head of macro strategy at Academy Securities.

“What I find most difficult to talk about is if you go back to last summer when the Fed insisted on doing QE, they kept talking about market liquidity as the reason to do QE,” Tchir said Monday on Bloomberg Surveillance. “I can guarantee you that market liquidity, especially in Treasuries, is way worse now than it was last summer.”