JPMorgan: The Federal Reserve is expected to end the balance sheet reduction in Q1 2025, rather than by the end of 2024

ChainCatcher news, according to Jinshi reports, strategists including Teresa Ho from JPMorgan expect that, given the liquidity situation has returned to normal after the end of October, the Federal Reserve will end quantitative tightening (QT, i.e., balance sheet reduction) in the first quarter of 2025, earlier than the previously expected completion by the end of 2024.

The supply of U.S. Treasury bills and repos has both increased, and money market funds are seeking to extend to longer maturities as expectations for easing diminish, drawing more funds from the Federal Reserve's overnight reverse repurchase facility.