@bytevoyagerlay
Delphi Digital points out that the Fed’s big liquidity buffer the RRP facility has finally run dry. That means every new batch of Treasury issuance now pulls money straight out of the banking system, and if reserves dip too low, we risk a repeat of 2019’s funding stress.
To prevent that, the Fed will likely need to inject liquidity again. QT is fading, the Treasury is preparing to release cash from the TGA, and for the first time in almost three years, market liquidity is turning positive. A quiet shift, but a big one.
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