{"id":18770,"date":"2025-03-20T02:05:17","date_gmt":"2025-03-20T02:05:17","guid":{"rendered":"https:\/\/www.vtmarkets.com\/?p=18770"},"modified":"2025-03-20T02:05:17","modified_gmt":"2025-03-20T02:05:17","slug":"week-ahead-fed-pause-on-the-horizon","status":"publish","type":"post","link":"https:\/\/www.vtmarkets.com\/sv-eu\/week_ahead\/week-ahead-fed-pause-on-the-horizon\/","title":{"rendered":"Week Ahead: Fed Pause on the Horizon"},"content":{"rendered":"\n<figure class=\"wp-block-image size-large\"><img loading=\"lazy\" decoding=\"async\" width=\"1024\" height=\"559\" src=\"https:\/\/www.vtmarkets.com\/sv\/wp-content\/uploads\/sites\/10\/2025\/03\/image_fx_-2025-03-20T100405.067-1024x559.png\" alt=\"\" class=\"wp-image-18775\" srcset=\"https:\/\/www.vtmarkets.com\/sv-eu\/wp-content\/uploads\/sites\/10\/2025\/03\/image_fx_-2025-03-20T100405.067-1024x559.png 1024w, https:\/\/www.vtmarkets.com\/sv-eu\/wp-content\/uploads\/sites\/10\/2025\/03\/image_fx_-2025-03-20T100405.067-300x164.png 300w, https:\/\/www.vtmarkets.com\/sv-eu\/wp-content\/uploads\/sites\/10\/2025\/03\/image_fx_-2025-03-20T100405.067-768x419.png 768w, https:\/\/www.vtmarkets.com\/sv-eu\/wp-content\/uploads\/sites\/10\/2025\/03\/image_fx_-2025-03-20T100405.067.png 1408w\" sizes=\"auto, (max-width: 1024px) 100vw, 1024px\" \/><\/figure>\n\n\n\n<p>For the past two years, the <strong>Federal Reserve has been pulling liquidity out of the financial system<\/strong>, and traders have felt every bit of it. <strong>Higher bond yields, tighter financial conditions<\/strong>, and a <strong>stock market that\u2019s had to fight for every inch of its gains<\/strong>. But now, things are changing. The Fed is signaling that <strong>it\u2019s ready to wind down Quantitative Tightening (QT)<\/strong>, and if history is any guide, that could mean a whole new chapter for stocks, bonds, and even crypto.<\/p>\n\n\n\n<figure class=\"wp-block-embed is-type-rich is-provider-twitter wp-block-embed-twitter\"><div class=\"wp-block-embed__wrapper\">\n<blockquote class=\"twitter-tweet\" data-width=\"500\" data-dnt=\"true\"><p lang=\"en\" dir=\"ltr\">The Federal Reserve holds interest rates steady in March and retains its outlook for two cuts later this year. Watch live analysis of the policy decision and  Fed Chair Powell&#39;s press conference at 2:30 PM ET: <a href=\"https:\/\/t.co\/Jq4APq8y7a\">https:\/\/t.co\/Jq4APq8y7a<\/a><\/p>&mdash; Yahoo Finance (@YahooFinance) <a href=\"https:\/\/twitter.com\/YahooFinance\/status\/1902420142429990924?ref_src=twsrc%5Etfw\">March 19, 2025<\/a><\/blockquote><script async src=\"https:\/\/platform.twitter.com\/widgets.js\" charset=\"utf-8\"><\/script>\n<\/div><\/figure>\n\n\n\n<p>The Fed started this QT cycle in <strong><a href=\"https:\/\/www.richmondfed.org\/publications\/research\/econ_focus\/2022\/q3_federal_reserve\" target=\"_blank\" rel=\"noopener\" title=\"\">June 2022, shrinking its $9 trillion balance sheet<\/a><\/strong> by letting bonds mature without reinvesting the proceeds. It was an effort to cool down inflation, but in the process, it <strong>made borrowing more expensive<\/strong> and <strong>put pressure on just about every asset class<\/strong>. Now, with QT <strong><a href=\"https:\/\/www.reuters.com\/markets\/us\/fed-watchers-see-good-chance-change-balance-sheet-drawdown-2025-03-18\/\" target=\"_blank\" rel=\"noopener\" title=\"\">expected to wrap up by May<\/a><\/strong>, the market is already shifting gears. Traders are watching closely, trying to figure out what happens next.<\/p>\n\n\n\n<p>Prediction markets seem sure of one thing: QT is ending soon. <strong>Polymarket<\/strong>, a betting platform that <strong><a href=\"https:\/\/polymarket.com\/elections\" target=\"_blank\" rel=\"noopener\" title=\"\">accurately called the 2024 U.S. presidential election<\/a><\/strong>, is putting the odds at a solid 100% that the Fed will be done with QT by April 30. That\u2019s a big deal because every time the Fed has stopped tightening in the past, the market has responded\u2014sometimes with sharp rallies, sometimes with short-term dips before a bigger move up.<\/p>\n\n\n\n<p>Looking at past cycles, there\u2019s a clear pattern. When the Fed launched <strong><a href=\"https:\/\/libertystreeteconomics.newyorkfed.org\/2019\/05\/ten-years-laterdid-qe-work\/\" target=\"_blank\" rel=\"noopener\" title=\"\">Quantitative Easing (QE) after the 2008 financial crisis<\/a><\/strong>, stocks surged. When it tried to pull back in 2017\u20132019, the market got choppy, leading to the 2018 <strong>\u201c<a href=\"https:\/\/www.reuters.com\/business\/finance\/taper-tantrum-ripples-10-years-mcgeever-2023-05-22\/\" target=\"_blank\" rel=\"noopener\" title=\"\">Taper Tantrum<\/a>.\u201d<\/strong> But when the Fed reversed course in late 2019, stocks took off again. The same thing happened after the massive stimulus of 2020 and 2021\u2014<strong><a href=\"https:\/\/www.schroders.com\/en-gb\/uk\/intermediary\/insights\/the-six-biggest-bull-runs-since-1962-and-their-corrections\/\" target=\"_blank\" rel=\"noopener\" title=\"\">the flood of liquidity fueled one of the biggest bull runs in history<\/a><\/strong>.<\/p>\n\n\n\n<p>Now, we\u2019re at another turning point. The S&amp;P 500 has already been climbing in anticipation of an easier Fed stance, but that doesn\u2019t mean it\u2019ll be a smooth ride. Historically, <strong>the start of a Fed policy shift can bring some turbulence<\/strong>. Rate cuts, which often come alongside the end of QT, sometimes signal economic slowdown, and the first reaction in markets isn\u2019t always a straight shot upward.<\/p>\n\n\n\n<p>In the bond market, expectations are shifting. Ending QT typically means <strong>lower interest rates over time<\/strong>, which should <strong>make bonds more attractive<\/strong>. But in the short term, traders will have to navigate some uncertainty as markets adjust.<\/p>\n\n\n\n<h2 class=\"wp-block-heading has-medium-font-size\">Markets This Week<\/h2>\n\n\n\n<p>Meanwhile, the U.S. dollar has been under pressure, trading around 102.65 after failing to hold support at 103.10. If the dollar weakens further, 102.20 could be the next level to watch, but a bounce could push it back toward 104.90 or 105.60.<\/p>\n\n\n\n<figure class=\"wp-block-image size-large\"><img loading=\"lazy\" decoding=\"async\" width=\"1024\" height=\"550\" src=\"https:\/\/www.vtmarkets.com\/sv\/wp-content\/uploads\/sites\/10\/2025\/03\/image-7-1024x550.png\" alt=\"\" class=\"wp-image-18771\" srcset=\"https:\/\/www.vtmarkets.com\/sv-eu\/wp-content\/uploads\/sites\/10\/2025\/03\/image-7-1024x550.png 1024w, https:\/\/www.vtmarkets.com\/sv-eu\/wp-content\/uploads\/sites\/10\/2025\/03\/image-7-300x161.png 300w, https:\/\/www.vtmarkets.com\/sv-eu\/wp-content\/uploads\/sites\/10\/2025\/03\/image-7-768x413.png 768w, https:\/\/www.vtmarkets.com\/sv-eu\/wp-content\/uploads\/sites\/10\/2025\/03\/image-7-1536x825.png 1536w, https:\/\/www.vtmarkets.com\/sv-eu\/wp-content\/uploads\/sites\/10\/2025\/03\/image-7.png 1722w\" sizes=\"auto, (max-width: 1024px) 100vw, 1024px\" \/><\/figure>\n\n\n\n<p>In currency pairs, EUR\/USD is hovering near 1.0940, with potential resistance at 1.1030, while GBP\/USD is sitting above 1.2960 and could test 1.3030 or 1.3090.<\/p>\n\n\n\n<p>Commodity markets are responding as well. <strong>Gold <\/strong>just hit a new all-time high, with traders keeping an eye on 3050 and 3080 for potential resistance.<\/p>\n\n\n\n<figure class=\"wp-block-image size-large\"><img loading=\"lazy\" decoding=\"async\" width=\"1024\" height=\"548\" src=\"https:\/\/www.vtmarkets.com\/sv\/wp-content\/uploads\/sites\/10\/2025\/03\/image-8-1024x548.png\" alt=\"\" class=\"wp-image-18772\" srcset=\"https:\/\/www.vtmarkets.com\/sv-eu\/wp-content\/uploads\/sites\/10\/2025\/03\/image-8-1024x548.png 1024w, https:\/\/www.vtmarkets.com\/sv-eu\/wp-content\/uploads\/sites\/10\/2025\/03\/image-8-300x161.png 300w, https:\/\/www.vtmarkets.com\/sv-eu\/wp-content\/uploads\/sites\/10\/2025\/03\/image-8-768x411.png 768w, https:\/\/www.vtmarkets.com\/sv-eu\/wp-content\/uploads\/sites\/10\/2025\/03\/image-8-1536x822.png 1536w, https:\/\/www.vtmarkets.com\/sv-eu\/wp-content\/uploads\/sites\/10\/2025\/03\/image-8.png 1722w\" sizes=\"auto, (max-width: 1024px) 100vw, 1024px\" \/><\/figure>\n\n\n\n<p>Oil remains volatile, with $69.85 acting as a key level, and natural gas is consolidating near $3.90.<\/p>\n\n\n\n<p>Bitcoin has been consolidating, but if it breaks higher, 85,950 and 87,450 could be in play. A drop would put 74,000 as a support level to watch. Ethereum is in a similar boat, with resistance at 2,000 and support at 1,700 or 1,650.<\/p>\n\n\n\n<figure class=\"wp-block-image size-large\"><img loading=\"lazy\" decoding=\"async\" width=\"1024\" height=\"549\" src=\"https:\/\/www.vtmarkets.com\/sv\/wp-content\/uploads\/sites\/10\/2025\/03\/image-9-1024x549.png\" alt=\"\" class=\"wp-image-18773\" srcset=\"https:\/\/www.vtmarkets.com\/sv-eu\/wp-content\/uploads\/sites\/10\/2025\/03\/image-9-1024x549.png 1024w, https:\/\/www.vtmarkets.com\/sv-eu\/wp-content\/uploads\/sites\/10\/2025\/03\/image-9-300x161.png 300w, https:\/\/www.vtmarkets.com\/sv-eu\/wp-content\/uploads\/sites\/10\/2025\/03\/image-9-768x411.png 768w, https:\/\/www.vtmarkets.com\/sv-eu\/wp-content\/uploads\/sites\/10\/2025\/03\/image-9-1536x823.png 1536w, https:\/\/www.vtmarkets.com\/sv-eu\/wp-content\/uploads\/sites\/10\/2025\/03\/image-9.png 1721w\" sizes=\"auto, (max-width: 1024px) 100vw, 1024px\" \/><\/figure>\n\n\n\n<p>The Fed\u2019s decision to pull back on QT is a game-changer, but that doesn\u2019t mean markets will react in a straight line. Liquidity drives markets, and when it starts flowing again, stocks and other assets tend to benefit. But with potential economic slowdowns and shifting interest rate expectations, there\u2019s plenty of room for surprises.<\/p>\n\n\n\n<p><strong><a href=\"https:\/\/www.vtmarkets.com\/trade-now\/\">Create your live VT Markets account<\/a>&nbsp;and&nbsp;<a href=\"https:\/\/myaccount.vtmarkets.com\/login\">start trading<\/a>&nbsp;now.<\/strong><\/p>\n\n\n\n<p><\/p>\n","protected":false},"excerpt":{"rendered":"<p>The Fed is ending QT\u2014what&#8217;s next for stocks, bonds, and crypto? Explore market trends, risks, and key levels to watch. &#8211; vtmarkets.com<\/p>\n","protected":false},"author":5,"featured_media":18775,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"_acf_changed":false,"footnotes":""},"categories":[6],"tags":[15,10],"class_list":["post-18770","post","type-post","status-publish","format-standard","has-post-thumbnail","hentry","category-week_ahead","tag-policy","tag-stocks"],"acf":{"acf_article_selection_author":""},"aioseo_notices":[],"_links":{"self":[{"href":"https:\/\/www.vtmarkets.com\/sv-eu\/wp-json\/wp\/v2\/posts\/18770","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/www.vtmarkets.com\/sv-eu\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/www.vtmarkets.com\/sv-eu\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/www.vtmarkets.com\/sv-eu\/wp-json\/wp\/v2\/users\/5"}],"replies":[{"embeddable":true,"href":"https:\/\/www.vtmarkets.com\/sv-eu\/wp-json\/wp\/v2\/comments?post=18770"}],"version-history":[{"count":0,"href":"https:\/\/www.vtmarkets.com\/sv-eu\/wp-json\/wp\/v2\/posts\/18770\/revisions"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/www.vtmarkets.com\/sv-eu\/wp-json\/wp\/v2\/media\/18775"}],"wp:attachment":[{"href":"https:\/\/www.vtmarkets.com\/sv-eu\/wp-json\/wp\/v2\/media?parent=18770"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/www.vtmarkets.com\/sv-eu\/wp-json\/wp\/v2\/categories?post=18770"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/www.vtmarkets.com\/sv-eu\/wp-json\/wp\/v2\/tags?post=18770"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}