Wall Street expects the Fed to end balance sheet reduction this year, but the possibility of a sharp brake is low.

BlockBeats news, on August 9, the Fed is expected to end the balance sheet reduction, but the actual closing date depends on the pace of interest rate cuts and the pressure in the financing market. Policymakers indicated that they would complete the reduction of U.S. debt holdings before the end of the year, and many on Wall Street believe that quantitative tightening is unlikely to end abruptly. However, recent weak economic data and Liquidity pressure risks have cast uncertainty on the outlook. ‘If the Fed intends to stimulate the economy, then it may stop reducing the balance sheet,’ U.S. bank strategists Mark Cabana and Katie Craig wrote in a report to clients on Wednesday. ‘If the Fed’s goal is to normalize monetary policy, then the reduction can continue.’ More and more signs indicate that the economic rise is slowing down faster than expected a few weeks ago, triggering a significant pump in global bond markets on Monday, with traders betting that the Fed and other Central Banks will become more aggressive in cutting interest rates. Morgan Stanley analysts wrote, ‘Two possible drivers may prompt the Fed to end the balance sheet reduction early, one is the drying up of Liquidity in the money market, and the other is a U.S. economic recession. But we believe that neither is likely to occur.’ (Jin Shi)