Quantitative Tightening

A central bank shrinking its balance sheet to drain money from the system.

Quantitative tightening is the reverse of quantitative easing: the central bank lets bonds mature or sells them, reducing the money supply and pushing up longer-term rates. It is used to cool inflation and unwind earlier stimulus, but can strain market liquidity.

Switching to quantitative tightening, the Fed let its bond holdings roll off to drain cash from markets.