The road for the Fed to raise interest rates is getting farther and farther, the road for interest rate cuts is endless, and the market is still waiting for the Fed policy to turn.

Recently, big Wall Street analysts such as Morgan Stanley and Barclays have predicted when to cut interest rates. Morgan Stanley analysts expect the Fed to cut interest rates for the first time in December next year and end the contraction in 2024.

Morgan Stanley analyst Seth Carpenter pointed out in the latest reportIf the economy falls into recession, the Fed may consider slashing interest rates by 100 basis points or more. If the bond market experiences a similar malfunctioning (dysfunctional) in March 2020 or recently, quantitative tightening could end early, at least temporarily.

Barclays said in its latest report that inflation will be controlled to some extent in 2023 as a result of interest rate hikes.The Fed will stop raising interest rates in March and immediately cut interest rates three times in a row, each by 25 basis points.

With regard to the contraction, analysts at Morgan Stanley said the Fed's plan was to shrink its balance sheet significantly, but would avoid a situation similar to the one in September 2019 in which traders shorted Treasuries through the repo market.

Last week, Fed officials said they would continue to reduce their holdings of Treasuries and mortgage-backed securities as planned, at a rate of about $1.1 trillion a year. The Fed began shrinking its chart in June and picked up its pace in September. It now shrinks by $60 billion a month in Treasuries and $35 billion in mortgage-backed securities (MBS).