The Federal Reserve, as of September 17, 2025, plans to continue reducing its holdings of Treasury securities and agency mortgage-backed securities. This ongoing quantitative tightening, despite a recent 0.25% cut to the federal funds rate target (now 4-4.25%), indicates a persistent effort to reduce the balance sheet. Investors should monitor the impact of reduced liquidity on bond markets and potentially real estate, as the Fed aims to bring inflation to 2% while assessing economic risks.