US net liquidity since just before the debt ceiling debate was "resolved"...
Since 31-May-2023 through 5-July-2023:
Fed balance sheet: -$88B (contraction)
Treasury general account: +$366B (contraction)
Overnight reverse repos: -$388B (expansion)
Net: -$66B (contraction)
OPINION: Only a relatively mild contraction in net liquidity since 31-May-2023 is expected to have only a mild negative impact on risk assets and #bitcoin price action.
The draining of the ORR to meet the needs of the growing TGA generally offset each other.
Also, the BTFP (and other liquidity patches) have partially offset ongoing #QT, that is, the reduction of the Fed's balance sheet.
Given that the contraction is less severe than many *experts* expected back in May, risk assets and $btc haven't been--and shouldn't be--impacted too negatively.
Dr. Jeff / Dr. Jeff Ross
npub1k7…3c04l
2023-07-06 20:51:29
Author Public Key
npub1k7vkcxp7qdkly7qzj3dcpw7u3v9lt9cmvcs6s6ln26wrxggh7p7su3c04lPublished at
2023-07-06 20:51:29Event JSON
{
"id": "645e275422866ad548cfa06c0893c09464a03643be4a2ed293ef7f2c71290834",
"pubkey": "b7996c183e036df27802945b80bbdc8b0bf5971b6621a86bf3569c332117f07d",
"created_at": 1688676689,
"kind": 1,
"tags": [
[
"t",
"bitcoin"
],
[
"t",
"qt"
]
],
"content": "US net liquidity since just before the debt ceiling debate was \"resolved\"...\n\nSince 31-May-2023 through 5-July-2023:\n\nFed balance sheet: -$88B (contraction)\nTreasury general account: +$366B (contraction)\nOvernight reverse repos: -$388B (expansion)\n\nNet: -$66B (contraction)\n\nOPINION: Only a relatively mild contraction in net liquidity since 31-May-2023 is expected to have only a mild negative impact on risk assets and #bitcoin price action.\n\nThe draining of the ORR to meet the needs of the growing TGA generally offset each other.\n\nAlso, the BTFP (and other liquidity patches) have partially offset ongoing #QT, that is, the reduction of the Fed's balance sheet.\n\nGiven that the contraction is less severe than many *experts* expected back in May, risk assets and $btc haven't been--and shouldn't be--impacted too negatively.",
"sig": "f6b394c8d930118024f149d1173c57802910b0a81a1215549029dd2fd3987f3d77661e05ac1619b01bd91415028d366a6b1c18af3933f747fd04f75b9b329657"
}