The Beginning of the End? Fed Liquidity Growth Slows Sharply

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The Beginning of the End? Fed Liquidity Growth Slows Sharply

 

Latest weekly balance sheet data from major Central Banks show aggregate liquidity growth dropping back to 25% from a 6-week average of +30% ( 3m ann.). The G4 equivalent (ex. China) slowed to 29% from the recent 37% average. The Fed is behind the downwards move, with monetary base growth slowing sharply to 40% (3m ann.), compared to a 70% average. Both reverse repos and non-reserve deposits rose sharply in the week. And, importantly, this slowdown is not being offset by a simultaneous rundown in the Treasury General Account. Elsewhere, liquidity growth is little changed on the previous week.

 

 

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