quantitative tightening
Central bank reducing money supply by letting bonds mature without replacement.
Quantitative tightening (QT) is when a central bank shrinks the amount of money in the economy. After buying large amounts of bonds during crises—a process called quantitative easing—the central bank can reverse course by simply letting those bonds expire. When a bond matures, the issuer pays back the money, and the central bank removes it from circulation rather than reinvesting in new bonds.
Central banks use QT to fight inflation when the economy is running too hot. By reducing the money supply, they make borrowing more expensive and saving more attractive, which cools down spending and prices. When you see QT mentioned in headlines, it typically signals the central bank believes inflation is a bigger concern than economic weakness, and it’s willing to risk slower growth to bring prices under control.
Written once as a plain-English reference, not as advice. Nothing here is a recommendation to buy or sell anything.