Treasury Interest Payments And Market Pullbacks

Earlier in the week just past, we pointed out in an update that the Treasury makes interest payments on its securities in the middle of each quarter, to the tune of ~40B. These payments are withdrawn from what is referred to as 'other reserve assets', and while (as we pointed out) the day after these payments are made the SPX rallies almost every time, it should be noted that after the first day the SPX has frequently pulled back; if not right away, then as the quarter progressed (blue arrows). This supports the idea of some sort of pullback in the stock market (chart below).