According to BlockBeats, the Federal Reserve is expected to conclude its balance sheet reduction by the end of the year, although the exact timing will depend on the pace of interest rate cuts and pressures in the financing market. Policymakers have indicated that the reduction of U.S. Treasury holdings will be completed by year-end, but many on Wall Street believe that quantitative tightening is unlikely to end abruptly. Recent weak economic data and liquidity pressure risks have added uncertainty to the outlook. Bank of America strategists Mark Cabana and Katie Craig noted in a report to clients on Wednesday, 'If the Fed intends to stimulate the economy, it may stop the balance sheet reduction. If the goal is to normalize monetary policy, the reduction can continue.'

There are increasing signs that economic growth is slowing faster than expected a few weeks ago, leading to a significant rise in global bonds on Monday as traders bet that the Fed and other central banks will become more aggressive in cutting interest rates. Morgan Stanley analysts wrote, 'Two possible drivers could lead the Fed to end the balance sheet reduction early: a liquidity drain in the money market or a U.S. economic recession. However, we believe both scenarios are unlikely.'