**Bank Bailout Facility Usage Soars For 2nd Straight Week, Money Market Inflows Resume**
Bank Bailout Facility Usage Soars For 2nd Straight Week, Money Market Inflows Resume
After last week saw The Fed's balance sheet continue is decline (https://www.zerohedge.com/markets/fed-balance-sheet-shrinks-4th-week-money-market-funds-see-largest-outflows-almost-2-years) back from its bank-bailout resurgence,all eyes will be back on H.4.1. report (https://www.federalreserve.gov/releases/h41/) this evening to see if things have continued to 'improve' or re-worsened amid regional bank shares re-testing post-SVB amid earnings disappointments.
Following the unexpected OUTFLOW the previous week, this week saw **money market funds resume their trend with a $53.8 billion INFLOW**...
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_Source: Bloomberg_
The breakdown was **$48.9 billion from Institutional funds** and **$4.98 billion from retail funds.**
That pushed assets back up near their $5.277 trillion record high and **suggests last week's deposit OUTFLOWS may be about to re-accelerate - not good news for banks?**
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_Source: Bloomberg_
On top of the news from First Republic this week, one could argue that Round 2 of the banking crisis (bank superwalk as Jim Bianco has put it) is just beginning.
Bear in mind though that it's tax-time and their are some odd seasonal impacts to the data.
Though not wanting to piss all over those hopeful fireworks, we note that **reverse repo continues to rise...**
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_Source: Bloomberg_
However, **the most anticipated financial update of the week** \- the infamous H.4.1. showed the **world's most important balance sheet shrank for the 5th straight week last week, by $30.5 billion**, notably more than last week's tumble (helped by a $16.6bn QT)...
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_Source: Bloomberg_
The Total Securities held outright on The Fed balance sheet fell to $7.84 trillion, the lowest since Sept 2021...
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_Source: Bloomberg_
Looking at the actual reserve components that were provided by the Fed, we find that **Fed backstopped facility borrowings ROSE AGAIN last week from $144 billion to $155.2 billion** (still massively higher than the $4.5 billion pre-SVB)...
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_Source: Bloomberg_
...but the composition shifted, as **usage of the Discount Window rose by $4 billion to $73.8 billion** (upper pane below) along with an **$8 billion increase in usage of the Fed's brand new Bank Term Funding Program, or BTFP, to $81.3 billion** (middle pane) from $79.0 billion last week. Meanwhile, other credit extensions - consisting of Fed loans to bridge banks established by the FDIC to resolve SVB and Signature Bank were relatively unchanged at around $170BN (lower pane)...
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_Source: Bloomberg_
Scanning down the H.4.1, we note that **Foreign repo down another $20 billion back to $0 finally** and **Other Fed Assets (loans to FDIC etc) rose $2.3 billion to $170.4 billion**...
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Of course we get to see the actual deposit outflows (or inflows) tomorrow after the bell, but it appears the hopeful bounce was nothing more than the tax-related seasonal we warned about last week.
Tyler Durden (https://cms.zerohedge.com/users/tyler-durden)Thu, 04/27/2023 - 16:41