PANews reported on March 19 that according to market analysis, the Federal Reserve may hint at the end of the quantitative tightening (QT) program in the upcoming interest rate decision, which may provide support for Bitcoin and other risky assets. The market generally expects the Federal Reserve to maintain interest rates in the range of 4.25%-4.50%, focusing on the future direction of the QT program. Since the launch of QT in June 2022, the Federal Reserve has gradually reduced the size of its balance sheet, and the end of QT may mark the beginning of a new monetary policy and inject liquidity into the market. Previously, Federal Reserve Chairman Jerome Powell hinted that QT may end in 2025.
Analysis points out that the end of QT may ease liquidity pressure in the U.S. Treasury market and may also be beneficial to risky assets such as Bitcoin. However, stagflation risks in economic forecasts may limit asset gains. Bank of America predicts that the Federal Reserve may suspend QT due to debt ceiling issues and may postpone plans for further interest rate cuts against the backdrop of lower economic growth expectations and higher inflation. In addition, data from the prediction platform Polymarket shows that the probability of QT ending before May is as high as 100%.
