- Also known as Low Cash flow
- During QT, the repo rates are increased, meaning, the lending rate from the central bank to the banks is raised and which in turn is trickled down to the customer
- Higher interest rates mean less cash flows into the economy, thereby lowering demand.
- This also slows down growth and usually a bear run ensures in such a period. The focus is not on growth rather keeping inflation in check
- QT is done via
- Printing less money by the Central Bank
- Increasing interest rates
- FMCG stocks in general do well during a QT period