Federal Reserve's Potential QT End May Boost Bitcoin and Risk Assets

According to PANews, market analysis suggests that the Federal Reserve might signal the end of its quantitative tightening (QT) program in its upcoming interest rate decision. This move could potentially support Bitcoin and other risk assets. The market widely anticipates that the Federal Reserve will maintain interest rates within the 4.25%-4.50% range, with a focus on the future direction of the QT program. Since initiating QT in June 2022, the Federal Reserve has gradually reduced its balance sheet size. Ending QT could signify the start of a new monetary policy, injecting liquidity into the market. Previously, Federal Reserve Chair Jerome Powell hinted that QT might conclude by 2025. Analysts indicate that the conclusion of QT could alleviate liquidity pressures in the U.S. Treasury market and potentially benefit risk assets like Bitcoin. However, the risk of stagflation in economic forecasts might limit asset gains. Bank of America predicts that the Federal Reserve might pause QT due to the debt ceiling issue and could delay further rate cuts amid lowered economic growth expectations and rising inflation. Additionally, prediction platform Polymarket shows a 100% probability of QT ending before May.