QT

I’m talking about a remarkably ambitious and poorly understood Fed project known as quantitative tightening — Q.T. for short.

Last week, some traders pointed to the ramping up of Q.T., combined with comments by Fed officials about rate increases, to explain large swings in Treasury prices.

“I am worried that we are piling Q.T. on top of these rate hikes and it will push us into recession,” said George Catrambone, the head of Americas trading and chief operating officer at DWS group.

“There are not any compelling signs that they won’t be able to continue Q.T. for a while,” he said.

Now, the Fed is reversing course through quantitative tightening, or Q.T., pulling back its support for financial markets while it raises interest rates to quell inflation.