From June 2022, to curb rising inflation, along with the higher-for-longer interest rate policy, the Fed began gradually reducing its balance sheet by selling MBS or stopping reinvestment of maturing bonds (QT).
As of last Wednesday, the Fed has reduced its assets from a peak of nearly USD 8.96 trillion to USD 7.48 trillion. However, at an appropriate time, the Fed will have to stop QT, or even reverse the impact of the previous QT policy.
In previous articles, Viet Hustler has analyzed in detail multiple times the possibility of Fed rate cuts in the near future. Therefore, this week's Macroeconomic article from Viet Hustler will analyze the Fed's second macroeconomic regulation tool: monetary policy. And among them, an equally important question as to whether the Fed will cut rates is: When will the Fed stop QT?
