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The Fed Just Ended QT — Here’s What Comes Next
The Federal Reserve quietly ended Quantitative Tightening (QT) on December 1st. This wasn’t optional — it was forced by stress inside the financial system.

1. Why QT Ended
Since 2022, the Fed shrank its balance sheet from $8.9T → $6.6T, draining liquidity.
But recently, funding markets showed that reserves were getting too low:
Repo rates drifted above target
Banks tapped the Standing Repo Facility more often
Fed officials warned that if repo stress continued, they would need to start buying assets again

These signals confirmed: QT hit its limit.

2. What’s Next: Stealth Easing (Non-QE QE)
Now that QT is over, the next step is a slow return to balance sheet expansion.
The Fed will call it “reserve management purchases,” not stimulus

But buying Treasuries = QE mechanics

Research groups expect $20B–$50B/month in Fed purchases in early 2026

On the same day QT ended, the Fed already injected $13.5B into the repo market.
Liquidity is coming back.

3. The 2019 Playbook
The last time QT ended (2019), the reaction was explosive:
S&P 500: +19%

NASDAQ: +28%

Gold: +18%

Bitcoin: 200%+

History shows:
When the Fed stops shrinking and starts growing its balance sheet, risk assets rally hard.

4. Outlook for 2026
The speaker expects an even bigger liquidity wave because:
Huge $2T deficit
Higher starting balance sheet
More debt → more printing → more liquidity

Investment angle:
Favor scarce assets like commodities, gold, and Bitcoin, and avoid using margin due to volatility.
The only major wildcard: political instability, not economics.

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