JPMorgan Chase: The Federal Reserve is expected to end tapering in Q1 2025 rather than before the end of 2024

Strategists including Teresa Ho at JPMorgan Chase predict that, given the liquidity situation has returned to normal after the end of October, the Federal Reserve will end quantitative tightening (QT, i.e., reducing balance sheet) in the first quarter of 2025. This was previously expected to be completed before the end of 2024. Both U.S. Treasury bills and repo supplies have increased, and money market funds are seeking to expand into longer terms under weakened easing expectations, both withdrawing more funds from the Fed's overnight reverse repurchase tool.