How Central Banks Are Executing Quantitative Tightening

Monetary Policy Explained with Fexingo: Central Banks, Money Supply, and Interest Rates · Jul 28, 2026 · 7m · transcript

As of mid-2026, the Federal Reserve has shrunk its balance sheet by over $1.5 trillion from the 2022 peak, and the European Central Bank is accelerating its own unwind. In this episode, Lucas and Luna break down the mechanics of quantitative tightening: how central banks let bonds mature without reinvesting, why the pace matters for money market rates, and what happens when reserves get scarce. They also compare the Fed's cautious approach to the ECB's more aggressive timeline and touch on the Bank of Japan's delicate balancing act. A concrete look at the quiet unwind reshaping…