As of December 1, the Fed has officially ended quantitative tightening (QT). They’re no longer shrinking the balance sheet and are effectively in hold mode. This is different from rate cuts, it's much closer to the liquidity headwind just stopped.
Why does the end of QT matter?
- Until now: the Fed was letting maturing bonds roll off, draining dollars from the system.
- From here: that constant draining phase is over, and the next logical step at some point is adding liquidity.
Very roughly in the 2017-2019 episode:
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QT ran from October 2017 until the conclusion of the normalization program in August 2019.
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On October 11, 2019, the Fed announced that it would begin buying about $60B per month in T-bills with operations, starting October 15, 2019.
On March 15, 2020, and especially March 23, 2020, the Fed launched and then made open-ended a new round of large-scale asset purchases.
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But that whole window is heavily distorted by COVID (March 2020), so you cannot treat this as a hard rule like QT ends -> QE in 6 months.
BTC behavior around the QT end
In late 2018-2019: BTC put in a major bottom in the low 3k area as the "QT is ending" narrative built up, it repriced into the 12-13k zone within a few months.
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Altcoin pattern
In hard tightening & QT phases, BTC and ETH usually hold up better. When QT ends and easing expectations kick in, BTC tends to move first, and then liquidity rotates into alts, DeFi, and mid/small caps.
Fed chair transition
- Powell's term as Fed Chair ends in May 2026.
- Well before that, a new chair nomination window opens.
- At the same time, political pressure not to over-tighten into the economy and markets is rising.
Key dates to watch
- December 1, 2025: QT officially ends
- December 25, 2025: Trump has said he already knows who he will pick to replace Powell, and Scott Bessent has said the new chair may be announced before Christmas.
- May 2026: Powell’s term as Fed Chair ends (around May 15)