Finance & economics | A lovely wall

The Federal Reserve cleans up its money-printing mess

It wants to avoid upsetting markets, and is so far succeeding

The US Federal Reserve in Washington, DC.
Photograph: Getty Images
|Washington, DC

At this point, almost everyone in global markets is familiar with the notion of higher-for-longer interest rates. Soon, they are likely to meet another concept as important for understanding central-bank policy: less-for-longer quantitative tightening (QT). This phrase describes how the Federal Reserve intends to continue reducing its assets to undo its huge bond purchases during the covid-19 pandemic. It hopes that a less-for-longer approach will ultimately leave it with a smaller balance-sheet than would otherwise be the case.

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This article appeared in the Finance & economics section of the print edition under the headline “A lovely wall”

From the April 6th 2024 edition

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