Tapering IS Quantitative Tightening
America, China, and the Death of the International Monetary Non-System - American Affairs Journal
Russell Napieramericanaffairsjournal.org
(Early 2020 was a big exception to that, since the fiscal impulse and the rate of quantitative easing were so big that they overrode the rise in the TGA, which on its own would be negative for liquidity. The TGA was only increased that high basically for extra financial buffer to support everything else that was happening, since the sheer magnitude
... See moreLyn Alden • Deep Dive: Emerging Markets
Transition to QT Framework: QT is about reversing QE’s excesses and restoring balance-sheet normalcy.
QT 1.0 mostly let the portfolio “run off” (without reinvestment) but was muted by Treasury issuance patterns.
QT 2.0 takes a more active role—it seeks not only to shrink the balance sheet but also to alter its composition by favoring short-term reinv