New York Fed Says Quantitative Tightening Could Stop in 2025

The US central bank could halt the unwind of its balance sheet in 2025, according to Federal Reserve Bank of New York projections.

In two scenarios published Wednesday in an annual report, the New York Fed’s trading desk estimated balance-sheet reduction — a process known as quantitative tightening — could end in early or mid-2025, with bank reserves falling to about $2.5 or $3 trillion by the following year.

Fed officials began discussing a plan to begin slowing balance-sheet reduction at last month’s policy meeting, though no decisions were made at the gathering. Minutes of the meeting showed policymakers ...