Money market funds was outflows of over $7BN last week - the biggest weekly outflow since July - inching the total assets back from record highs...

The net outflow was driven by institutional funds losing over $14.3BN (while retail funds saw $7.3BN inflows - the 22nd straight week of retail money market fund inflows)...

Is the decoupling between bank deposits and money-market funds beginning to converge?

The Fed's balance sheet plunged by almost $75BN last week - its biggest weekly drop since July 2020

With regard to The Fed's QT program, it sold down $26BN in securities last week

Banks' usage of The Fed's emergency funding facility remains around $108BN (a modest decline on $394mm last week)...

The full breakdown shows a big slidew in 'other credit extensions'

The gap between bank reserves at The Fed and the US equity market cap diverged again...

Finally, we leave you with one thought - in 6 months and counting, America's 'smaller' banks will need to find that $100-billion plus from somewhere as that is when the BTFP bailout program ends (theoretically). Will regional bank balance sheets be stabilized by then?

Given the current bloodbathery in bond-land, we suspect we will know sooner rather than later.

Fed balance sheet shrinks massive $75BN...
{ai:summary}Last week, money market funds experienced their largest weekly outflow since July, with institutional funds losing over $14.3 billion. However, retail funds saw inflows for the 22nd consecutive week. The Federal Reserve's balance sheet also saw a significant drop of almost $75 billion, the largest decline since July 2020. The breakdown shows a decline in QT, notes and bonds, MBS, and other credit extensions, while discount windows increased slightly. There is concern over the gap between bank reserves at the Fed and the US equity market cap. In six months, smaller banks may face challenges as the BTFP bailout program ends. The stability of regional bank balance sheets remains uncertain, given current conditions in the bond market. #economy

Fed Balance Sheet Plunges By Most In Over 3 Years As Retail Money-Market Inflows Continue

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