Usage Of Fed’s Emergency Bailout Facility Hits New High; Money-Market Inflows Continue

US Money Market funds noticed a 3rd straight week of inflows ($29 billion this previous week) to a new document excessive of $5.15 trillion…

Source: Bloomberg

Retail money-market funds noticed inflows for the fifteenth straight week (and institutional funds additionally noticed a second straight week of inflows)…

Source: Bloomberg

The decoupling between money-market fund inflows and financial institution deposits continues…

Source: Bloomberg

The Fed’s stability sheet shrank for the eighth straight week, tumbling $36.6 billion on the week to its lowest since July 2021…

Source: Bloomberg

As far as QT is anxious, The Fed is again to promoting with Securities down nearly $33 billion on the week to its lowest since July 2021…

Source: Bloomberg

Usage of The Fed’s emergency financial institution bailout facility rose by $606 million to a brand new document excessive at $106 billion…

Source: Bloomberg

The breakdown from The Fed’s H.4.1 table…

• QT: down $33BB, dominated by $32BN sale of US Treasury, MBS flat

• Discount Window: down $0.3BN to $1.9BN

• BTFP: up $0.6BN to $106BN

• Other Credit Extensions (FDIC loans): down $4BN to $148BN

Finally, US fairness markets proceed to diverge considerably from financial institution reserves at The Fed…

Source: Bloomberg

We depart you with one thought – in 7 months and counting, America’s ‘smaller’ banks might want to discover that $100-billion plus from someplace as that’s when the BTFP bailout program ends (theoretically). Will regional financial institution stability sheets be stabilized by then? Or will the present massacre in bonds be the catalyst for an additional spherical of ache?