Wall Street strategists have different forecasts for when Fed's quantitative tightening ends

The US Federal Reserve's (Fed) decision to lower the pace of its balance sheet unwind has led some Wall Street strategists to revise their forecasts for the end of the quantitative tightening program.

The US regulator has been reducing its holdings since June 2022 by gradually raising the amount of Treasuries and mortgage bonds which can run off without re-investment.

Barclays Plc expects the process to continue until June 2026. At the same time, Bank of America Corp predicts the quantitative tightening program to end in December 2025. Earlier, both organizations forecasted the Fed's balance sheet unwind to go on until September this year.

Meanwhile, according to Deutsche Bank, a change in the pace of quantitative tightening is unlikely to affect its timing, with the program ending in the first quarter of 2026.

Chairman of the US central bank Jerome Powell says that there are some signs of increased tightness in the money markets. It is a key factor in determining the timing and path of balance sheet reduction, Bloomberg adds.