The Federal Reserve (the Fed, like a big bank for the whole country) is slowly reducing the money it added to the economy during the pandemic. This is called quantitative tightening (QT). It's like slowly taking away extra toys to avoid having too many!
- The Fed is reducing its bond holdings (like IOUs from the government).
- They are aiming to avoid causing problems in the financial system.
- Banks initially thought the Fed would stop QT in June, but now expect it to continue longer.
| Fact | Number/Prediction |
|---|---|
| Money the Fed added during the pandemic | Trillions of dollars |
| Money the Fed has already reduced | Over $2 trillion |
| New bank prediction for QT end | End of the third quarter (September) |
