Wall Street Sees End of Fed’s Balance-Sheet Runoff This Year (1)

The end of the Federal Reserve’s balance-sheet unwind is in sight, though its actual conclusion depends on the pace of interest-rate cuts and stresses in funding markets.

Many on Wall Street agree that an abrupt end to quantitative tightening, or QT, is unlikely, with policymakers signaling its rolloff of Treasury holdings will finish by year-end. But recent data suggesting an economic slowdown as well the risk of liquidity pressures — already evident in the financial system — call that outlook into question.

“If the Fed is cutting to stimulate the economy, then QT will likely stop,” Bank of America strategists ...