After an unusual outflow last week, US money market funds saw a $6.3BN inflow this week, back up close to record highs...
Source: Bloomberg
Once again, retail funds saw inflows (no outflows since April) of $7.8BN while institutional funds declined $1.5BN...
Source: Bloomberg
That is the second week of institutional outflows as retail inflows send total retail funds to a new record high...
Source: Bloomberg
And the gap between money fund assets and bank deposits continue to grow...
Source: Bloomberg
After last week's huge drop, The Fed's balance sheet continued its shrinkage (down $22BN to its smallest since June 2021)...
Source: Bloomberg
With regard to the QT program, The Fed continues to sell securities, down 17.3BN last week to its smallest since June 2021...
Source: Bloomberg
Usage of The Fed's emergency funding facility for banks remains at record highs around $108BN (+$116MN last week)...
Source: Bloomberg
The detailed breakdown is as follows:"
Fed QT: $2.5BN drop in TSY securities; $15BN drop in MBS
Discount Window: up $100MM to $3.2BN
BTFP up $116MM to $107.7BN
Other credit Extensions (FDIC Loans) down $3.1BN to $81.9BN
The spread between US equity market cap and bank reserves at The Fed is starting to converge...
Source: Bloomberg
And finally, as we like to remind readers, there's an $108BN hole in my bucket... and bank stocks are starting to catch on to the reality that in 6 months, they'll have to fill it...
Source: Bloomberg
...or The Fed will simply keep the "emergency" facility open ad infinitum under pressure from the administration during an election year.
