An end to the Fed's balance sheet reduction is in sight, but the actual closing date depends on the pace of interest rate cuts and funding market pressures. Policymakers have hinted that the US Treasury reduction will be completed by the end of the year, and many on Wall Street believe that quantitative tightening (QT) is unlikely to end abruptly. But recent weak economic data and the risk of liquidity stress have clouded the outlook. "If the Fed is going to stimulate the economy, it may stop shrinking the balance sheet," said Bank of America strategists Mark Cabana and Katie Craig. "If the Fed's goal is to normalize monetary policy, then the balance sheet reduction can continue."