Quantitative tightening
Quantitative tightening is the reduction of a central bank's asset holdings by allowing securities to mature without full reinvestment or by selling them. It reverses part of earlier balance-sheet expansion and can tighten financial conditions, although market effects vary.
In a hypothetical month, $8 billion of central bank bonds mature and $3 billion is reinvested. With no other changes, its bond holdings fall by $5 billion.
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