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Strategies & Market Trends : ajtj's Post-Lobotomy Market Charts and Thoughts
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To: ajtj99 who wrote (73465)11/5/2022 6:32:39 AM
From: Lee Lichterman III7 Recommendations

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Treasury General Account
It's like the Government's checking account. They have their short term money held at the Fed and then pay their bills from it. It generally goes up after bond auctions and bleeds down as they pay regular bills.
Most websites tracking the Fed balance sheet just report the headline amount, the overall total but that total is actually 3 accounts combined together. The actual Fed balance, the TGA and RRP (Repos).
Repos have been pretty steady and should slowly decline as external interest rates become competitive with the Repo rate so banks stop using the repo facility. Regardless, right now, the repos are pretty flat.
Then there's the TGA. Normally, it spikes up after Treasury auctions then bleeds back down as normal bills are paid. Drawdowns are liquidity since the Treasury is paying cash to the economy. Treasury auctions, (balance going up at the Fed), is a liquidity drain because they are exchanging treasuries for cash thus cash is leaving the economy for paper.
Normally would spike 50-60 billion from auctions then bleed down a billion to maybe 20 billion each week. Breathe in, breathe out. The last couple weeks though have seen the usual 50-60 in after Treasury auctions but then like this week, 84 billion went out. They also have done outflows above average multiple weeks in a row. Starting in October, they did 28, 39+, and 38 billion which made the liquidity actually positive for the month and totally erased the Fed's QT.
This week's 84 billion out is enough to pretty much erase November's too since the Fed is only doing 95 a month unless they add in after the election.

EDIT - I should add, the last time there was TGA action like this was in July and I believe was the reason for the big rally July/August.
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