Latest / Monetary Policy Explained with Fexingo: Central Banks, Money Supply, and Interest Rates
How Central Banks Use Quantitative Tightening
Episode 66 of Monetary Policy Explained with Fexingo dives into quantitative tightening (QT) — the opposite of QE. Lucas and Luna unpack how the Fed reduced its balance sheet from nearly $9 trillion to around $6.5 trillion by June 2026, focusing on the mechanics of letting bonds mature without reinvesting. They discuss why QT started in 2022, how it differs from rate hikes, and the liquidity crunch in September 2019 as a cautionary tale. Specific numbers include the $95 billion monthly cap on Treasury and MBS roll-offs, and the Fed's shift to a slower pace in early 2025. The hosts also…
The skinny
The skinny isn't ready yet — notes appear once the transcript is processed.