The Federal Reserve announced it will end quantitative easing (QT) on December 1st. The new federal funds rate is 3.75%-4%, the recommended rate for overnight interbank lending. More noteworthy is the Fed's adjustment to its balance sheet. Quantitative easing (QE) refers to balance sheet expansion (increased liquidity), while quantitative tightening (QT) refers to balance sheet contraction (reduced market liquidity). Since 2022, the Fed has been shrinking its balance sheet, thereby withdrawing liquidity from the market and the banking reserve system. They announced on December 1st that they would stop shrinking their balance sheet, meaning they will maintain a stable balance sheet size of $6.5 trillion. They will inject new funds, but their use will also change. According to the wording in the Fed's policy implementation details released on October 29th, they are sacrificing the housing market. Since its balance sheet will no longer shrink from December 1st, the Fed will reinvest the proceeds from agency securities (two types of securities it holds: mortgage-backed securities and Treasury securities) in short-term Treasury bills. (Short-term Treasury bills) are not new mortgage-backed securities. Powell mentioned this in his speech, but many people did not understand it.