Fed to Halt QT by Dec. 1 as Swollen Treasury Cash Pile Squeezes Crypto Liquidity

Overview

• The Federal Reserve plans to suspend quantitative tightening on December 1 and reinvest MBS paydowns into Treasury bills to keep holdings steady.
• The Treasury General Account rose to about $965 billion in October during the government shutdown, pulling cash out of the banking system.
• Bank reserves slipped toward the low end of the Fed’s ample range as roughly $20 billion flowed into the reverse repo facility and Standing Repo borrowing neared $10 billion.
• Bitcoin remained range-bound and altcoins lagged, with analysts linking the weakness to constrained dollar liquidity rather than sentiment.
• Analysts say a durable crypto rebound likely needs new system liquidity from QE or a TGA drawdown, with limited relief possible after month-end adjustments, a potential mid-November reopening, or the December 1 QT pause.