Federal Reserve quantitative-tightening risks early end due to debt limit bickering.
The Federal Reserve’s quantitative-tightening program is in danger of being cut short due to the political bickering in Washington over raising the national debt limit. The quantitative-tightening program involves the Federal Reserve shrinking its bond portfolio by up to $95 billion a month, which is draining liquidity from the US financial system. This is in addition to the Federal Reserve’s interest-rate hikes, which are aimed at controlling inflation.
The potential to end the quantitative-tightening program earlier than expected could provide relief to the US economy. The Federal Reserve’s quantitative-tightening program has been in place since October 2017 and has already had an impact on the US economy. The program has resulted in higher borrowing costs for businesses and consumers, and has reduced liquidity in the US financial system.
However, the potential to end quantitative-tightening early could provide relief to the US economy. This could be beneficial for businesses and consumers, as it could lead to lower borrowing costs. It could also lead to an increase in liquidity in the US financial system, which could help to stimulate economic growth.
The decision to end quantitative-tightening early is ultimately up to the Federal Reserve. The Federal Reserve is likely to take into account the current political situation in Washington, as well as the impact of quantitative-tightening on the US economy, when deciding whether or not to end the program early.
In conclusion, the Federal Reserve’s quantitative-tightening program is at risk of being cut short due to the political bickering in Washington over raising the national debt limit. An early end to quantitative-tightening could provide relief to the US economy, as it could lead to lower borrowing costs for businesses and consumers, as well as increased liquidity in the US financial system. The decision to end quantitative-tightening early is ultimately up to the Federal Reserve, and will depend on the current political situation in Washington, as well as the impact of quantitative-tightening on the US economy.
News Source