BlockBeats News, August 9th, the Fed's balance sheet reduction is coming to an end, but the actual closing date depends on the pace of interest rate cuts and the pressure in the financing market. Decision-makers have indicated that they will complete the reduction of US Treasury bonds before the end of the year. Many people on Wall Street believe that quantitative tightening is unlikely to end suddenly. However, recent weak economic data and liquidity pressure risks have cast uncertainty on the outlook. 'If the Fed intends to stimulate the economy, it may stop reducing the balance sheet,' wrote Mark Cabana and Katie Craig, strategists at Bank of America, in a report to clients on Wednesday. 'If the Fed's goal is to normalize monetary policy, then the reduction of the balance sheet can continue.' Increasing signs indicate that the pace of economic growth is slowing faster than expected a few weeks ago, triggering a significant pump in global bonds on Monday, as traders bet that the Fed and other central banks will become more proactive in interest rate cuts. Morgan Stanley analysts wrote, 'Two possible driving factors may prompt the Fed to end the reduction of the balance sheet ahead of schedule, one is the depletion of liquidity in the money market, and the other is an economic recession in the United States. But we believe that neither of these is likely to occur.' (Jin Shi)
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Wall Street expects the Federal Reserve to end its balance sheet reduction this year, but the possibility of a sudden brake is not high.
BlockBeats News, August 9th, the Fed's balance sheet reduction is coming to an end, but the actual closing date depends on the pace of interest rate cuts and the pressure in the financing market. Decision-makers have indicated that they will complete the reduction of US Treasury bonds before the end of the year. Many people on Wall Street believe that quantitative tightening is unlikely to end suddenly. However, recent weak economic data and liquidity pressure risks have cast uncertainty on the outlook. 'If the Fed intends to stimulate the economy, it may stop reducing the balance sheet,' wrote Mark Cabana and Katie Craig, strategists at Bank of America, in a report to clients on Wednesday. 'If the Fed's goal is to normalize monetary policy, then the reduction of the balance sheet can continue.' Increasing signs indicate that the pace of economic growth is slowing faster than expected a few weeks ago, triggering a significant pump in global bonds on Monday, as traders bet that the Fed and other central banks will become more proactive in interest rate cuts. Morgan Stanley analysts wrote, 'Two possible driving factors may prompt the Fed to end the reduction of the balance sheet ahead of schedule, one is the depletion of liquidity in the money market, and the other is an economic recession in the United States. But we believe that neither of these is likely to occur.' (Jin Shi)