This month (June 2022), the Federal Reserve starts quantitative tightening.
Quantitative easing involved the Fed printing money and buying bonds. The seller of those bonds received money, which then proceeded to circulate in the economy. Quantitative tightening reverses this process. As the bonds mature, money is paid into the Fed which removes it from circulation, and the money supply shrinks.
The Fed's record breaking QE in the last two years resulted in frothy stock markets and inflation in the price of goods and services. QT should bring down both the markets and inflation.
Here's the schedule of bond maturities this month:
QT might also tank the crypto markets now that Wall Street investors dominate this space - they'll be tempted to cash in to cover their losses in the stock market. On the other hand governments like El Salvador and Central African Republic are buying bitcoin in a bid to escape inflation and weak currencies.
We're in the middle of a giant experiment. Will QT affect crypto? We'll find out in a few months.
