Source: https://mochatrade.com/learn/glossary/quantitative-tightening

# Quantitative tightening
URL: https://mochatrade.com/learn/glossary/quantitative-tightening
Last modified: 2026-10-17

Quantitative tightening is the Fed shrinking its balance sheet by letting bonds mature without replacing them, draining reserves from banks. Rate decisions get the headline; QT, reserves and the Treasury's cash balance [set the level of liquidity underneath](https://mochatrade.com/learn/us-market-structure/how-the-fed-moves-markets), and [Treasury supply](https://mochatrade.com/learn/us-market-structure/who-moves-us-stocks) has to find new buyers.

## Related terms

- Liquidity: https://mochatrade.com/learn/glossary/liquidity
- Quantitative easing: https://mochatrade.com/learn/glossary/quantitative-easing
- US Treasury: https://mochatrade.com/learn/glossary/us-treasury
- Federal Reserve: https://mochatrade.com/learn/glossary/federal-reserve
- Term premium: https://mochatrade.com/learn/glossary/term-premium
- Market cap categories (mega/large/mid/small): https://mochatrade.com/learn/glossary/market-cap-categories