#美国国债 Quantitative Easing (QE) and the Link to the Treasury Market

After the 2008 financial crisis, the Federal Reserve implemented QE by purchasing long-term Treasury bonds to lower yields and stimulate the economy. During the pandemic in 2020, the scale of QE reached $120 billion per month, leading to the Federal Reserve's balance sheet expanding to nearly $9 trillion. After starting Quantitative Tightening (QT) in 2022, the supply and demand relationship for Treasury bonds reversed, exacerbating the rise in yields. The future pace of QT will directly affect market liquidity, and if a recession occurs, it may force the Federal Reserve to restart QE.