The March Federal Reserve (Fed) meeting revealed a surprising internal debate as policymakers grappled with a significant shift in their quantitative tightening (QT) strategy. The central bank opted to dramatically slow down its balance sheet reduction, dropping Treasury runoff caps from $25 billion to a mere $5 billion per month. While this decision enjoyed broad support, some members, including Governor Christopher Waller, expressed dissent and preferred to maintain the original pace of QT. Meanwhile, concerns around the looming U.S. debt ceiling played a pivotal role in prompting this change. A presentation from a New York Fed official highlighted how slowing down the drawdown would act as a buffer for liquidity during periods of constrained government borrowing, particularly during a potential debt ceiling resolution.