JPMorgan and Bank of America predict: The Federal Reserve will end quantitative tightening early this month

Jinse Finance reported that strategists from JPMorgan and Bank of America expect the Federal Reserve to halt the reduction of its approximately $6.6 trillions balance sheet this month, bringing an early end to the process aimed at draining liquidity from financial markets. Both banks have moved up their forecasts for the end of the Fed's quantitative tightening due to the recent rise in borrowing costs in the US dollar funding market. Previously, they had expected the balance sheet reduction, which began in June 2022, to continue until December or early next year. The market generally anticipates that Fed officials will decide the direction of the balance sheet at next week's rate decision meeting. Although a 25 basis point rate cut is seen as highly likely, there is still disagreement on Wall Street about when policymakers will end quantitative tightening. Institutions such as TD Securities and Mizuho Securities have moved their forecasts up to October, while analysts from Barclays and Goldman Sachs believe the end will come later.