Quantitative Tightening
Quantitative tightening (QT) is a monetary policy process in which a central bank reduces its balance sheet by allowing maturing asset holdings to roll off the balance sheet without reinvestment, thereby shrinking the monetary base and reserve balances.
Example: Example: After years of asset purchases, the central bank begins QT by allowing maturing Treasuries to roll off the balance sheet without reinvestment, gradually shrinking the size of its asset holdings.
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