📉 Why the Fed Really Ended QT
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The Fed stopped Quantitative Tightening on December 1, 2025 — not because a crisis is coming, but because the U.S. government needs more money to borrow and spend. Instead of restarting QE openly, the Fed is quietly redirecting liquidity behind the scenes.
1. Not a Crisis Signal
No liquidity shortage, no bank failure risk. The reverse repo hitting zero simply means old excess cash is gone.
2. The Hidden Policy Shift
Treasuries: The Fed is rolling over all maturing government debt — a stealth form of QE that keeps government borrowing easy.
Mortgages: Mortgage liquidity is being drained and redirected into Treasury bills.
The balance sheet looks “flat,” but the flow of money is being shifted toward government spending.
3. What Comes Next
Short-term rates likely fall in 2026.
Long-term rates rise as markets price in future inflation.
Deregulation may let banks buy more Treasuries, acting like QE without calling it QE.
4. The Real Mandate
The Fed’s actions ultimately support government borrowing, inflation, and a growing money supply — not deflation.
#FedPolicy #EconomicInsights #financialeducation #USEconomy IndiaExport #MarketUpdate
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