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Treasury General Account: Difference between revisions
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After the debt ceiling deal is signed, analyst has now expressed worry about the liquidity drain that rebuilding the TGA will mean , combined with the normal QT the FED is doing. It will be like a double negative for liquidty, while before the event it was like a null effect between the two. | After the debt ceiling deal is signed, analyst has now expressed worry about the liquidity drain that rebuilding the TGA will mean , combined with the normal QT the FED is doing. It will be like a double negative for liquidty, while before the event it was like a null effect between the two. | ||
Different Scenarios it could play out? | ==== Different Scenarios it could play out? ==== | ||
===== '''Liquidity coming from Reserve Repo''' ===== | |||
Fed’s Reverse Repo facility stands at 2.1 trillion, and offers a reward of 5.05. <ref>https://www.newyorkfed.org/markets/desk-operations/reverse-repo</ref> | Fed’s Reverse Repo facility stands at 2.1 trillion, and offers a reward of 5.05. <ref>https://www.newyorkfed.org/markets/desk-operations/reverse-repo</ref> | ||
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* Majority of issuance from treasuary needs to be T Bills and no long dated bonds, since MMF can only hold short term assets. | * Majority of issuance from treasuary needs to be T Bills and no long dated bonds, since MMF can only hold short term assets. | ||
'''Liquidity coming from Bank Reserves''' | ==== '''Liquidity coming from Bank Reserves''' ==== | ||
* | * | ||
# | # | ||