The FED and their Quantitative Tightening

My new YouTube video about Quantitative Tightening and the effect it will have on traditional and crypto markets

Through quantitative tightening, the Federal Reserve reduces its supply of monetary reserves in order to tighten its balance sheet—and it does so simply by letting the bonds and other securities it has purchased reach maturity.

QT’s main impact is in the financial markets: It’s seen as likely to drive up real or inflation-adjusted yields, which in turn makes stocks somewhat less attractive. And it should put upward pressure on Treasury term premia, or the compensation investors need for bearing interest-rate risks over the life of a bond.

The central banks of Japan, Denmark, Sweden, and Switzerland also set negative rates. The main goal of QT is to normalize (i.e. raise) interest rates in order to avoid increasing inflation, by increasing the cost of accessing money and reducing demand for goods and services in the economy.