Banks' Usage Of Fed's Emergency Funds Jumps To New Record High, Money-Market Inflows Soar
Money-market funds saw inflows for the 7th week of the last 8 with a $42BN jump (the most in 2 months) to a new record high of $5.625TN...
Source: Bloomberg
The inflow was dominated by a $24BN increase in Institutional fund assets while Retail also saw a sizable $17.7BN increase...
Source: Bloomberg
And the divergence between money-market fund assets and bank deposits continues to grow...
Source: Bloomberg
And while we actually saw huge deposit outflows (on a non-seasonally-adjusted basis) - despite The Fed's seasonally-adjusted deposits increase - The Fed balance sheet shrank by another $20BN last week to its smallest since June 2021...
Source: Bloomberg
The Fed's QT program continues apace with$18.4BN sold last week to its smallest since June 2021...
Source: Bloomberg
Usage of The Fed's emergency bank funding facility jumped by $328 Million last week to a new high of $108BN...
Source: Bloomberg
Fed BS weekly change:
Fed balance sheet QT (Notes and bonds decline): $4.255 trillion, down $18,2BN
Discount Window $2.1BN, down $800M from $.29BN
BTFP new record $107.9BN, up $400MM
Other Credit Extensions (FDIC Loans): $133.8BN, down $0.6BN from $134.4BN
Finally, US equity markets and bank reserves at The Fed have converged a little recently, but the gap remains wide (thanks to the plunge in reverse repo balances)...
Source: Bloomberg
Tick, tock, banks!
Source: Bloomberg
You have six months to figure out how to clean up the $108 Billion hole in your balance sheet that you're currently paying The Fed's exorbitant rates to fill.
