Fed to End Quantitative Tightening Next Week, Say JPMorgan, BofA
JPMorgan and Bank of America have accelerated their forecasts for the end of the Federal Reserve's quantitative tightening (QT) program, now expecting it to conclude as early as next week. The shift follows mounting stress in dollar funding markets and signs of reserve scarcity, with Powell reserves dipping below $3 trillion.
"Markets have been operating with much more frictions," noted JPMorgan strategist Teresa Ho. Bank of America's Mark Cabana and Katie Craig added, "Money markets at current or higher levels should signal to the Fed that reserves are no longer 'abundant.'"
The accelerated timeline—previously projected for December—was prompted by elevated rates in the repurchase agreement market and other technical indicators. This liquidity pivot is widely viewed as a bullish signal for risk assets, including cryptocurrencies.
