QT is shrinking of central bank balance sheets. The balance sheets of the developed countries’ central banks have shrunk nearly 17% from their 2022 peak. But this is not reducing liquidity in any way that matters to financial markets. There are two reasons for this explored here.
This piece examines the linkage between Quantitative Easing (QE), Quantitative Tightening (QT) and the new operating systems being introduced by central banks. Surprisingly, it reveals exciting stuff.