Wall Street Braces for Year-End "Cash Crunch," Fed May Hint at "Money Printing" This Week

BlockBeats news, December 9 — As the end of the year approaches, Wall Street banks are bracing themselves to deal with rising money market pressures. Analysts say this may prompt the Federal Reserve to consider measures to rebuild liquidity buffers in this $12.6 trillion market. Fed policymakers will meet this week for the first time since the central bank stopped shrinking its balance sheet (the so-called quantitative tightening), and there are signs that reserves within the banking system are no longer ample. The Fed has yet to resolve policy issues following the balance sheet reduction, including the composition of its Treasury holdings. But with financing costs remaining high, an increasing number of market participants believe policymakers should take more concrete measures to ease tensions, such as resuming direct purchases of securities to supplement reserves. They expect Fed Chair Jerome Powell may provide some hints on the next steps at the conclusion of the monetary policy meeting on Thursday Beijing time. (Jin10)