Wrightson: The Federal Reserve may end quantitative tightening this week

Jinse Finance reported that analysts from the research institution Wrightson predict that the Federal Reserve may be ready to announce the end of its balance sheet reduction this week. Recent movements in the overnight repo market indicate that financing conditions have tightened, and bank reserves have dropped to levels close to what is considered equilibrium. The Wrightson team stated that action by the Federal Reserve this week would be a prudent move to avoid putting excessive pressure on the funding markets. They pointed out: "Even if the Federal Reserve believes that the supply of reserves is still quite ample, we also doubt whether the FOMC will ignore the recurring warning signals in the federal funds rate over the past few weeks."