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Economics
Quantitative Tightening
When a central bank reduces the money supply by selling bonds or letting bonds mature without replacing them.
Quantitative tightening (QT) usually pushes interest rates higher and hurts asset prices (stocks, crypto, real estate). It is the opposite of QE. Markets often react negatively to QT because it removes the easy-money support.
It's the opposite of printing money — the central bank is quietly sucking money out of the economy.
Real world: After years of quantitative easing, the Federal Reserve started quantitative tightening in 2022. They let bonds mature without buying new ones, shrinking their balance sheet and making money tighter and more expensive.
💡 Quantitative tightening is when the central bank takes away the punch bowl — markets usually don't like it.