- Polymarket signals 100% chance QT ends before May
- Ending QT may boost stocks and Bitcoin
- Dollar could weaken, bond yields may fall
On Prediction platform Polymarket, traders are signaling with 100% certainty that the Federal Reserve will end Quantitative Tightening (QT) before May 2025. QT, the Fed’s process of reducing its balance sheet by allowing bonds to mature without reinvestment, has been ongoing as a measure to curb inflation. The expectation of its early conclusion could have wide-ranging effects on financial markets.
How Ending QT Affects Markets
If the Fed indeed ends QT, it could signal a shift toward a more accommodative monetary policy, possibly hinting at future interest rate cuts or at least a pause in tightening. Such a move often supports risk assets, which means we could see upward momentum in the stock market and Bitcoin . Investors generally interpret an end to QT as a sign that the Fed is becoming more supportive of economic growth.
Moreover, government bond yields may decline as the Fed’s demand for bonds returns, while the U.S. dollar could weaken in response to a more dovish stance. This potential market shift is being closely watched by traders across all asset classes.
Crypto and Stocks Stand to Gain
Bitcoin, which often thrives in looser monetary environments, could benefit significantly. Similarly, stock market indices might see positive sentiment return, driven by investor hopes for continued liquidity and lower borrowing costs. Market participants are now eyeing upcoming Fed meetings and economic data for confirmation of this anticipated policy shift.
