U.S. Federal Reserve Ceases Quantitative Tightening Program

U.S. Federal Reserve concluded its quantitative tightening (QT) program on December 1, 2025. The decision followed direction from the Federal Open Market Committee (FOMC) meeting held on October 29, 2025.

The FOMC directed the New York Fed to reinvest all principal payments, thus halting any reduction in securities holdings. Jerome Powell remains a significant figure, continuing as Chair. “On October 29, 2025, the FOMC announced that it would cease the runoff of its securities holdings starting on December 1, 2025,” said Jerome Powell, Chair of the Federal Reserve Board. Monetary Policy Normalization

This conclusion of QT is poised to influence macroeconomic conditions by possibly alleviating strain in dollar funding markets. The decision to end QT brings a notable liquidity shift into the markets.

Financial industries perceive this change as a bullish signal for both fixed income and risk assets. Cryptocurrencies like Bitcoin and Ethereum could see benefits as liquidity conditions evolve positively.

Market participants could see favorable conditions for Bitcoin, Ethereum, and other cryptocurrencies. The decision is viewed as reducing pressures that could otherwise constrict market fluidity.

Past instances, such as QT1 from 2017 to 2019, highlight how shifts in monetary policy influence asset classes. Changes in dollar liquidity and funding markets will impact cryptocurrencies, potentially heightening volatility and risk appetite.