Quick Market Alert for Professional Investors:
The Fed’s Reverse Repo (RRP) Facility has plummeted to $58.8 billion, signaling that these liquidity reserves are effectively at the end of their usefulness. However, simultaneously, the US Treasury announced a $4 billion T-bill paydown, settling on February 20, injecting cash back into the financial system.
Why This Matters – Key Observations:
- Recent withholding tax trends, as covered in Liquidity Trader- Macro Liquidity reports, suggest improved Treasury cash balances, enabling bill reductions.
- The paydowns could redirect liquidity into money markets, risk assets, or even back into the RRP. The market’s reaction is the wildcard.
- Cycle indicators in Lee Adler’s proprietary models point to conditions that could drive unexpected market responses.
🚨 Will This Liquidity Surge Spark a Rally or Bring Volatility?
Lee Adler’s upcoming Liquidity Trader report will break down the full market impact, including potential effects on bond yields, equity flows, and liquidity cycles.
📊 Catch Up with the Latest Update: February 2025 Treasury Supply and Debt Ceiling Report: Liquidity Trends, Market Risks, and Tactical Insights
🔍Read the Last Macro Liquidity Update
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