In a major shift for U.S. monetary policy, the Federal Reserve has officially halted its three-year quantitative tightening (QT) program. This marks a turning point as the central bank transitions from reducing its balance sheet to stabilizing liquidity, aiming to support a healthy banking system and guide inflation back towards its target levels. The Fed’s decision to end QT follows a period of significant asset reduction, shrinking its holdings by over $2.2 trillion in U.S. Treasuries and mortgage-backed securities. This marks one of the largest balance sheet contractions in history, reflecting the central bank’s attempt to reverse excessive liquidity created during the COVID-19 era stimulus.