Fed QE Expected Sooner as Bond Yields Rise and Liquidity Pressures Grow

As reported by Cryptofrontnews, rising bond yields and ongoing liquidity pressures on smaller U.S. banks are increasing expectations for a return of Federal Reserve quantitative easing (QE). Despite rate cuts totaling 150 basis points since September 2024, 10-year and 30-year yields remain above pre-cut levels, signaling that investors believe current policy is insufficient. Smaller banks continue to rely on emergency liquidity facilities, suggesting that short-term measures may not be enough. Major institutions like UBS and Bank of America are forecasting new Fed programs to support reserves and manage liquidity. Global central banks, including those in China and Japan, are also easing, adding pressure on the Fed to respond. A return to asset purchases could boost risk assets and support cryptocurrencies, as seen in past cycles.