With the Treasury General Account refilling and quantitative tightening ongoing, reserve balances are likely to fall, raising the risk of funding strains and increased equity market volatility.
The reverse repo facility has dropped to just $33 billion, its lowest level since 2021, signaling that excess market liquidity has largely disappeared. With the Treasury General Account refilling and quantitative tightening ongoing, reserve balances are likely to fall, raising the risk of funding strains and increased equity market volatility.
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