Fed Chair Powell Hints Quantitative Over

Good News for Rates: Fed Chairman Powell Hints Quantitative Tightening Could End Soon

Federal Reserve Chairman Jerome Powell said the Fed’s “quantitative tightening” (QT) program might wrap up in the next few months.

Quick refresher: QT is when the Fed sells assets, like bonds, to pull money out of the system; the opposite of quantitative easing (QE), when the Fed buys bonds to keep rates low and boost the economy.

• QE: The Fed bought bonds to push prices up and keep interest rates down (that helped fuel growth).

• QT: The Fed has been selling bonds since 2022, which pushes prices down and keeps rates higher than they’d otherwise be.

Powell also admitted the Fed may have waited too long to stop QE, saying:

“With the clarity of hindsight, we could have and perhaps should have stopped asset purchases sooner.”