Fed: The end of QT – Nordea Markets

Kjetil Olsen, analyst at Nordea Markets, suggests that as per the market expectations, the US Fed will end QT in the second half of 2019 as this was the clear message from the minutes of the January meeting.

Key Quotes

“It has already improved market conditions and we keep the forecast of one more hike before the Fed is done.”

“The big U-turn FOMC meeting in January and Powell’s press conference after the meeting gave way to a dovish repricing of Fed, which at least partly lies behind the current market rally. Consensus has moved towards a flat funds rate for 2019 and a higher probability for a cut than a hike, and an October stop to QT.”