Why fears about quantitative tightening are overblown

The benefits of collateral availability may outweigh the monetary liquidity withdrawn by central banks

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For over a decade, the financial markets have been awash with easy money. Now, the tide is turning.

The Federal Reserve has been shrinking its near $8.5 trillion balance sheet by $47.5 billion a month since June and will double down come September. The withdrawal of central bank liquidity, known as quantitative tightening (QT), is widely expected to increase the pressure on markets, which are already reeling from a series of aggressive rate hikes. But this need not – indeed, ought not – be the

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