If Treasury issues $1.25 trillion of net new Bills in 2024 at a rate above the 5.33% RRP rate, RRP will go to $0, boosting Net Liquidity by $1.1 trillion. If FED drains $70/month via QT, that’s a Net Liquidity DRAIN of $.84 trillion. Adding it all up, over the next 12 months Net Liquidity should rise by $260 billion, or $21.67/month. I think it happens faster, over the next 10 months. But that’s picking nits.Bottom line: liquidity is set to RISE over the next year unless the Fed expands QT and/or Treasury reduces new Bill issuance.
please create a graph of net liquidity
FED Balance Sheet Assets: $7.9 trillion. (-) RRP: $1.1 trillion (-) TGA: $.8 trillion
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Net Liquidity: $6 trillion
If Treasury issues $1.25 trillion of net new Bills in 2024 at a rate above the 5.33% RRP rate, RRP will go to $0, boosting Net Liquidity by $1.1 trillion. If FED drains $70/month via QT, that’s a Net Liquidity DRAIN of $.84 trillion. Adding it all up, over the next 12 months Net Liquidity should rise by $260 billion, or $21.67/month. I think it happens faster, over the next 10 months. But that’s picking nits.Bottom line: liquidity is set to RISE over the next year unless the Fed expands QT and/or Treasury reduces new Bill issuance.
https://twitter.com/TheCarter758/status/1720972561821970537