Fed Emergency Bank Bailout Facility Usage Hits New Record High; Money Market Funds See Another Small Outflow
For the second straight week, money market funds saw outflows, falling $18.2 billion - the biggest weekly decline since Xmas week 2022 (ex-tax day drop)...
Source: Bloomberg
And for the second straight week, all the outflows were institutional (-$24.89 billion) while retail funds saw a ninth straight week of inflows...
Source: Bloomberg
Is this related to the chase into tech stocks?
The money market fund outflow (which leads banks deposit data by a week), is interesting because it comes after banks saw a huge deposit outflow the prior week...
Source: Bloomberg
Having gone nowhere for two weeks, The Fed balance sheet shrank by $26.3 billion last week, basically back in line with pre-SVB levels...
Source: Bloomberg
As far as QT is concerned, The Fed sold a decent $19.4 billion of its assets, down to its lowest since August 2021...
Source: Bloomberg
The US central banks has $106 billion of loans outstanding to financial institutions through its two backstop lending facilities...
Source: Bloomberg
With banks' usage of The Fed's emergency Bank Term Funding Program rising once again to a new record at $102.7 billion (up $0.8 billion from last week), while discount window usage slipped $0.4 billion to $3.2 billion...
Source: Bloomberg
The breakdown from The Fed's H.4.1 table...
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QT (securities held outright): $19BN drop to $7.701TN
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Discount Window borrowings down $0.4BN to $3.2BN
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BTFP up $0.8BN to new record $102.7BN
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Other credit extensions (FDIC loans) down $8BN to $172.3BN
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Other Fed assets up $2.1BN to $41.6BN
The US equity market continues to charge ahead, even as bank reserves at The Fed contracted modestly...
Source: Bloomberg
Finally, as a reminder, banks have 9 months left under the original 12-month BTFP Fed bailout program to find a way to stabilize their balance sheets.
Not only have they failed to do so, usage of the BTFP facility is at a new all time high, and yields are rising even more (great MTM losses).
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