Federal Reserve Chair Jerome Powell indicated the end of quantitative tightening may be near, closely monitoring liquidity conditions. Powell highlighted signs of gradual tightening, including firming repo rates. The Fed’s balance sheet has decreased from $9 trillion to $6.6 trillion since 2022. Uncertainty remains on how far QT can go, but ample liquidity supports moving forward. Powell emphasized the importance of interest-paying powers for rate control and the need for nimbleness with the balance sheet in the future.

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