On January 18th, Bank of America now believes that the Federal Reserve’s quantitative tightening action will end in September instead of March, citing limited volatility in the funding market, limited discussion of balance sheet policies, and no concerns about dynamics related to the debt ceiling. The time to end QT largely depends on the time to resolve the debt ceiling and the speed/scale of the Treasury’s General Account (TGA) reconstruction, “strategists Katie Craig and Mark Cabana wrote in the report.
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