Capital IdeasTM
Investment insights from Capital Group
Categories
FRB
Quantitative tightening: Where does it go from here?
Tom Hollenberg
2024年3月28日
The US Federal Reserve (Fed) signalled that rate cuts are coming, although it remained noncommittal on when they may occur and left its benchmark interest rate unchanged at a range of 5.25% to 5.50% for the fifth consecutive meeting. Fed Chair Jerome Powell also addressed the central bank’s plans for quantitative tightening (QT), indicating that it would soon begin slowing (or tapering) the rate at which it is shrinking its balance sheet, but did not provide details on when the taper would begin.
Since June 2022, the Fed has been conducting a round of quantitative tightening — slowly reducing the size of its balance sheet by allowing securities to mature and not reinvesting the proceeds. Now, as inflation nears the Fed’s target, the central bank has signalled it will pare back its quantitative tightening, meaning the balance sheet will continue to decrease but at a slower pace.
How low can the Fed’s balance sheet go?
As at 11 March 2024. “Other” category includes federal agency debt, unamortised premiums on securities, unamortised discounts on securities, repo, float, central bank liquidity swaps, other fed assets, foreign exchange assets, gold, and special drawing rights (SDRs). Sources: Capital Group, US Federal Reserve
Based on recent statements from Fed governors, the most realistic scenario appears to be that the central bank will begin tapering the QT programme in June, assuming the Fed believes there will be sufficient liquidity in the market. Powell stated that slowing the pace of QT would not mean the Fed is changing the final target level of its balance sheet, although tapering means it would approach that target “more gradually.”
How this will affect markets remains to be seen, but slowing the balance sheet runoff should reduce the likelihood of an unintended liquidity crunch in US Treasury markets, and by extension, broader risk assets.
RELATED INSIGHTS
過去の実績は将来の成果を保証するものではありません。投資の価値および投資収益は減少することも増加することもあり、当初投資額の一部または全部を失うことがあります。本情報は投資、税務もしくはその他の助言の提供、または証券の売買の勧誘を意図するものではありません。
個人に帰属する記述は、その個人の出版日現在の意見を述べたものであり、必ずしもキャピタル・グループまたはその関連会社の意見を反映したものではありません。特に明記がない限り、すべての情報は記載された日付現在のものです。一部の情報は第三者から取得したものであり、そのため、かかる情報の信頼性については保証いたしません。