The Federal Reserve said Wednesday it will end balance sheet run-off on Dec. 1, marking the end of a process known as quantitative tightening that lets the central bank's bond holdings shrink, so money drains out of the financial system instead of adding more in.

Key Takeaways The Federal Reserve is expected to cut interest rates to a range of 3.75%–4%, but officials remain divided and cautious amid unclear economic data.Analysts anticipate the Fed will soon end its quantitative tightening program,

Concerns in credit markets have percolated in recent weeks. Fed Chair Jay Powell isn't concerned that they may be indicative of broader problems.

Jay Powell declared the central bank was “driving in the fog” as the Federal Reserve cut interest rates in the middle of a government shutdown that has deprived the institution of some economic data. The quarter-point cut, which brings the US benchmark rate down to 3.75 per cent, was broadly expected. It now sits at the lowest level since 2022.

Fed Governor Waller says the U.S. central bank is entering an era that embraces DeFi and digital assets within the mainstream financial system.

On Wednesday, California Attorney General Rob Bonta joined a coalition 23 attorneys general in filing an amicus brief in the U.S. Supreme Court in Donald J. Trump v. Lisa D. Cook, a case concerning President Trump’s attempt to remove Federal Reserve Governor Lisa Cook from her position on the Federal Reserve Board.

Fed officials had previously agreed to end QT once the US banking system showed signs of shifting from a so-called abundant level of liquidity to a regime where they had “ample” supplies of reserves.

U.S. stocks were not far from all-time intraday highs on Wednesday immediately after Federal Reserve officials cut their benchmark interest-rate target by a quarter of a percentage point, as widely expected.