Is US QT Already Dead?

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Is US QT Already Dead? Understanding the Growing Pressures on the US Fed to ‘Ease’ Liquidity

 

The Fed is saying one thing (headline QT) and doing another (adding liquidity). The reality is that QE is easier to engage than disengage. The threshold for minimum US banks’ reserves is likely at least US$2.5 trillion and, at the latest QT pace, we could get very close to this danger point in a few months. We confidently expect liquidity to be higher by year-end. Watch bond market volatility for evidence of tensions, and the US dollar and the yield curve slope for signs liquidity is coming back.

 

 

 

See our latest published research, Global View: Is US QT Already Dead? Understanding the Growing Pressures on the US Fed to ‘Ease’ Liquidity – January 2023

 

 

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