JUST IN: Fed Ends QT and Shifts to Modest Treasury Purchases to Keep Reserves “Ample
The Federal Reserve officially ended quantitative tightening on December 1, 2025, and is now letting its balance sheet stabilize (and potentially grow very slowly) through technical reinvestments and possible Treasury bill purchases.
Here’s what actually happened (no hype, just facts):
Key Points :
- QT is over. The Fed is no longer reducing its balance sheet.
- Starting now, all maturing agency MBS principal (~$15–25B/month recently) will be reinvested into Treasury securities (mostly T-bills).
- Maturing Treasuries will be fully rolled over instead of capped at $5B/month.
- Combined, this implies ~$20–30B/month of gross Treasury additions in the near term — not new QE, just replacing runoff and offsetting growth in currency + other liabilities.
- Fed officials have explicitly said they may buy additional T-bills if reserves fall below “ample” levels (current target zone appears
~8–11% of GDP). No fixed $45B/month figure has been announced or confirmed by the Fed.
Rate Path
- Markets are pricing an 85%+ chance of a 25 bps cut at the December 9–10 FOMC meeting (taking fed funds to 3.75–4.00%).
- Powell & Co. continue to emphasize the dual mandate: maximum employment + 2% inflation.
Crypto Takeaway
Bitcoin is trading ~$91,300 today. The combination of:
- No more QT drain
- Likely December rate cut
- Stabilizing/gradually rising reserves
…is unambiguously positive for risk assets and liquidity-sensitive markets like crypto.
This isn’t 2020-style “unlimited QE,” but it does remove a major headwind and adds a mild tailwind — exactly the kind of environment that has historically fueled the next leg up in BTC and alts.
Do you think this marks the start of the next big crypto leg higher?
YES or NO? 🚀
