Money-Market Fund Assets Hit New Record High; Banks’ Usage Of Emergency Fed Funds Jumps

US Money Market funds saw a fourth straight week of inflows ($14 billion this past week) to a new record high of $5.53 trillion…

Source: Bloomberg

Retail money-market funds saw inflows for the 16th straight week (and institutional funds also saw a 3rd straight week of inflows)…

Source: Bloomberg

The decoupling between money-market fund inflows and bank deposits continues…

Source: Bloomberg

The Fed’s balance sheet rose last week (ending a 9 week treak of shrinkage), rising $1.5 billion on the week…

Source: Bloomberg

As far as QT is concerned, The Fed’s securities holdings rose by $346mm last week – the first increase in 3 months

Source: Bloomberg

Usage of The Fed’s emergency bank bailout facility rose by $1.2BN to a new record high at $107BN…

Source: Bloomberg

The breakdown from The Fed’s H.4.1 table…

• Total securities held rose by $300MM (increase in TIPS holdings)

• Discount Window increase $13MM to $1.911BN

• BTFP new record $106.9BN, up $1.2BN

• Other credit extensions (FDIC loans) down $3.6BN to $145.4BN

Finally, US equity markets continue to diverge significantly from bank reserves at The Fed…

Source: Bloomberg

We leave you with one thought – in 7 months and counting, America’s ‘smaller’ banks will need to find that $100-billion plus from somewhere as that is when the BTFP bailout program ends (theoretically). Will regional bank balance sheets be stabilized by then?

Or will the current bloodbath in bonds be the catalyst for another round of pain?