Analysts expect Fed to halt balance-sheet run-down amid money-market stress
Market watchers believe the Fed is close to pausing its quantitative-tightening (QT) programme at the upcoming Oct 28-29 meeting, due to strain in short-term funding markets. Repo rates have spiked, banks have tapped the Fed’s Standing Repo Facility and liquidity reserves are under pressure. With the balance sheet trimmed from $9 trillion in 2022 to ~$6.6 trillion, the room to remove further reserves is narrowing. Some analysts expect the formal announcement to come only in January 2026, but signals may appear soon.
neutral
22h ago
Analysts expect Fed to halt balance-sheet run-down amid money-market stress
Market watchers believe the Fed is close to pausing its quantitative-tightening (QT) programme at the upcoming Oct 28-29 meeting, due to strain in short-term funding markets. Repo rates have spiked, banks have tapped the Fed’s Standing Repo Facility and liquidity reserves are under pressure. With the balance sheet trimmed from $9 trillion in 2022 to ~$6.6 trillion, the room to remove further reserves is narrowing. Some analysts expect the formal announcement to come only in January 2026, but signals may appear soon.
neutral
Analysts expect Fed to halt balance-sheet run-down amid money-market stress
about 22 hours ago
1 min read
82 words
Short-term funding stress drives expectations that the Fed will pause balance-sheet reduction.
Market watchers believe the Fed is close to pausing its quantitative-tightening (QT) programme at the upcoming Oct 28-29 meeting, due to strain in short-term funding markets. Repo rates have spiked, banks have tapped the Fed’s Standing Repo Facility and liquidity reserves are under pressure. With the balance sheet trimmed from $9 trillion in 2022 to ~$6.6 trillion, the room to remove further reserves is narrowing. Some analysts expect the formal announcement to come only in January 2026, but signals may appear soon.
Market watchers believe the Fed is close to pausing its quantitative-tightening (QT) programme at the upcoming Oct 28-29 meeting, due to strain in short-term funding markets. Repo rates have spiked, banks have tapped the Fed’s Standing Repo Facility and liquidity reserves are under pressure. With the balance sheet trimmed from $9 trillion in 2022 to ~$6.6 trillion, the room to remove further reserves is narrowing. Some analysts expect the formal announcement to come only in January 2026, but signals may appear soon.