It is like allowing a reservoir to drain gradually instead of refilling every bucket that leaves.
01
Go deeper
Runoff and outright sales are different ways to reduce holdings. QT can affect reserve balances and financial conditions. It need not have an equal and opposite effect to an earlier round of QE.
02
Make it concrete
Hypothetical illustration. Hypothetically, $10 billion of securities matures and only $4 billion is replaced; holdings fall by $6 billion before other changes.
03
When you read a headline
A smaller balance sheet and a higher policy rate are different policy tools.