On January 16th, Barclays currently predicts that the quantitative tightening action of the Federal Reserve will end in September instead of March, citing that the meeting minutes released last month did not mention balance sheet tightening. Barclays strategist Joseph Abate wrote in the report that the decision of the Federal Reserve to stop reducing its balance sheet may depend more on the ratio of reserves to bank assets rather than a specific date. Barclays assumes that the Federal Reserve hopes to lower the reserve to asset ratio to around 12%, which may be reached by August 2025 without a debt ceiling.
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