Bill Dudley, Columnist

The Fed Has Learned Its Money-Market Lessons

Quantitative tightening won’t lead to another cash crunch.

September 8, 2022 at 11:00 AM UTC

Corrected

September 8, 2022 at 12:02 PM UTC

Bill Dudley is a Bloomberg Opinion columnist. A former president of the Federal Reserve Bank of New York, he is a member of Coinbase Global's advisory council.

There will still be plenty to go around.
Photographer: Fabrice Coffrini/AFP/Getty Images

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Now that the US Federal Reserve has gone into full quantitative tightening mode, reversing an asset-buying program that had expanded its balance sheet to nearly $9 trillion, a worry is emerging: Could a disruptive cash crunch ensue, along the lines of what happened in money markets a few years ago?

Don’t be too concerned. This time around, the Fed is much better prepared.