JPMorgan Chase: The Fed is expected to end its balance sheet reduction in the first quarter of 2025 rather than before the end of 2024

Odaily News Strategists such as Teresa Ho of JPMorgan Chase expect that the Fed will end quantitative tightening (QT, i.e., balance sheet reduction) in the first quarter of 2025, given that liquidity conditions have returned to normal since the end of October. Previously, it was expected to complete the process by the end of 2024. The increase in the supply of U.S. Treasury bills and repurchase agreements, and the expansion of money market funds to longer maturities amid weakening expectations of easing have all drawn more funds from the Fed's overnight reverse repurchase facility. (Jinshi)