Fed Balance Sheet Plunges By Most In Over 3 Years As Retail Money-Market Inflows Continue
Money market funds was outflows of over $7BN last week - the biggest weekly outflow since July - inching the total assets back from record highs...
Source: Bloomberg
The net outflow was driven by institutional funds losing over $14.3BN (while retail funds saw $7.3BN inflows - the 22nd straight week of retail money market fund inflows)...
Source: Bloomberg
Is the decoupling between bank deposits and money-market funds beginning to converge?
Source: Bloomberg
The Fed's balance sheet plunged by almost $75BN last week - its biggest weekly drop since July 2020
Source: Bloomberg
With regard to The Fed's QT program, it sold down $26BN in securities last week
Source: Bloomberg
Banks' usage of The Fed's emergency funding facility remains around $108BN (a modest decline on $394mm last week)...
Source: Bloomberg
The full breakdown shows a big slidew in 'other credit extensions'
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QT - notes and bonds - declined by $17BN to $4.238TN
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MBS declined by $4BN to $2.499TN
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Discount Windows increased by $0.4BN to $3.1BN
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BTFP dropped by $0.4BN to $107.6BN
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Other credit extensions dropped by $48BN to $85BN
The gap between bank reserves at The Fed and the US equity market cap diverged again...
Source: Bloomberg
Finally, we leave you with one thought - in 6 months and counting, America's 'smaller' banks will need to find that $100-billion plus from somewhere as that is when the BTFP bailout program ends (theoretically). Will regional bank balance sheets be stabilized by then?
Source: Bloomberg
Given the current bloodbathery in bond-land, we suspect we will know sooner rather than later.
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