Fed Chair Powell Says Underlying Pace Of Quantitative Tightening Is About $1T/Year; Reserves Appear Quite Ample, So Quantitative Tightening Has Ways To Go
Portfolio Pulse from Benzinga Newsdesk
Federal Reserve Chairman Jerome Powell has stated that the underlying pace of quantitative tightening is approximately $1 trillion per year. He also mentioned that the reserves appear quite ample, indicating that quantitative tightening has a long way to go.
June 28, 2023 | 2:54 pm
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The statement by Fed Chair Powell about the pace of quantitative tightening and ample reserves suggests a potential impact on the SPY ETF, which tracks the S&P 500 and is sensitive to monetary policy changes.
Quantitative tightening is a monetary policy used by central banks to decrease the amount of liquidity in the economy. It often leads to higher interest rates, which can negatively impact stock prices. As SPY tracks the S&P 500, it is likely to be affected by these changes. The statement about ample reserves suggests that this policy could continue for a while, potentially putting downward pressure on SPY.
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