Wrightson: The Federal Reserve may end quantitative tightening this week

BlockBeats News, October 27, analysts from 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 fallen to levels close to what is considered equilibrium.

The Wrightson team stated that action by the Federal Reserve this week would be a cautious move to avoid putting excessive pressure on funding markets. They pointed out: "Even if the Federal Reserve believes that the supply of reserves remains quite ample, we doubt whether the FOMC will ignore the repeated warning signals that have appeared in the federal funds rate in recent weeks."