Further Evidence of Fed Tightening

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Further Evidence of Fed Tightening

 

Latest weekly balance sheet data from major Central Banks show aggregate liquidity growth stabilising at 21%, compared to the recent early-April peak of 35% ( 3m ann. rate). The US Fed is leading the downturn. US monetary base growth has dropped to 26% compared to the 78% April peak. The jump in reverse repos is the main factor slowing Fed liquidity expansion. Importantly, this is not being offset by a simultaneous rundown in the Treasury General Account. The ECB and Bank of England are also gently curtailing liquidity growth. Meanwhile, the People’s Bank of China looks to be moving in the opposite direction.

 

 

See our latest published research, Weekly Global Liquidity Update 11 June  2021

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