Fed will start ‘quantitative tightening’ this September – JP Morgan

Following the hawkish FOMC Minutes, the US banks rolled out their analysis of when the US Federal Reserve (Fed) can start the balance-sheet normalization.

“We think the Fed will start ‘quantitative tightening’ this September by allowing maturing assets to run off its balance sheet,” said JP Morgan. The bank adds, “We expect the FOMC will phase in a $100bn-per-month cap on runoff... double the maximum pace its balance sheet was reduced during 2017 to 2019.”

On the other hand, Goldman Sachs expects the balance sheet squeeze could begin relatively quickly following the interest rate lift.

Read: S&P 500 tumbles to low-4700s as big tech/growth stocks battered after surprisingly hawkish FOMC minutes trigger QT fears