Fed: where do things stand on the QT front?

With the exception of a brief interruption during the SVB crisis, the Fed's balance sheet is shrinking gradually. It has fallen by $ 700bn since its peak in June 2022 and should lose another $ 1,000bn over the next year. In 2023, quantitative tightening caused no stress, as bank liquidity remained abundant. Up until now, market attention has focused on normalising policy rates, but after an eleventh hike this week, that process is drawing to a close. QT is a secondary tightening ...