Assessing Market Conditions ahead of Quantitative Tightening

Rajdeep Sengupta and Andrew Smith

Economic Bulletin, 2022, issue July 11, 2022, 4

Abstract: Quantitative tightening (QT)—the reduction in the Federal Reserve’s balance sheet—will transfer a significant amount of Treasury and agency mortgage-backed securities to investors. This transfer will be larger than the first endeavor with QT in 2017 and will occur at a time when financial markets are strained, suggesting this round of QT has the potential to be more disruptive compared with the benign start to the 2017 runoff.

Keywords: Quantitative Tightening; Federal Reserve Balance Sheet; Monetary Policy (search for similar items in EconPapers)
JEL-codes: E52 E58 (search for similar items in EconPapers)
Date: 2022
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