Central Banks
Wall Street Sees End of Fed’s Balance-Sheet Runoff This Year
- Central bank doing quantitative tightening since June 2022
- Abrupt end to runoff is unlikely despite cuts, strategists say
A television station broadcasts Jerome Powell speaking after a Federal Open Market Committee meeting on the floor of the New York Stock Exchange on July 31.
Photographer: Michael Nagle/BloombergThis article is for subscribers only.
The end of the Federal Reserve’s balance-sheet unwind is in sight, though its actual conclusion depends on the pace of interest-rate cuts and stresses in funding markets.
Many on Wall Street agree that an abrupt end to quantitative tightening, or QT, is unlikely, with policymakers signaling its rolloff of Treasury holdings will finish by year-end. But recent data suggesting an economic slowdown as well the risk of liquidity pressures — already evident in the financial system — call that outlook into question.