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General TradingQ
Quantitative Tightening (QT)
The process by which a central bank reduces its balance sheet by selling government bonds or allowing them to mature without reinvestment. QT is the opposite of quantitative easing and aims to tighten monetary conditions.
Example
“In 2022, the Federal Reserve began quantitative tightening by letting up to $95 billion in bonds roll off its balance sheet each month, which contributed to rising Treasury yields and pressure on equity valuations.”