Deutsche Bank "Fed expected to expand balance sheet in Q1 next year"

Deutsche Bank said it expects the US Federal Reserve (Fed) to expand its balance sheet (resume quantitative easing) in the first quarter of next year.

On the 7th (local time), according to economic news channel Walter Bloomberg, Deutsche Bank said in a report, "It is highly likely that the Fed will begin to expand its balance sheet during the first quarter of 2025." The bank analyzed that "the recent economic slowdown and concerns about liquidity tightening will form the backdrop for a shift to accommodative monetary policy."

Balance sheet expansion is a policy tool in which the Fed buys government bonds or other securities to supply liquidity to the market, and the market views this as a de facto signal of the reintroduction of 'quantitative easing (QE)'.