All posts tagged: BTFP

US Banks See Massive Deposit Flight (Biggest Since SVB) As Fed Ends BTFP ‘Arb’

US Banks See Massive Deposit Flight (Biggest Since SVB) As Fed Ends BTFP ‘Arb’

After two weeks of outflows, money market funds saw $42BN of inflows last week, sending the total assets above $6TN for the first time ever.. Source: Bloomberg Not exactly a bullish sign for stocks as investors are choosing super safe money markets, where six-month bills yield about 5.17%, as the Fed sticks to its higher-for-longer policy. In a breakdown for the week to Jan. 31, government funds – which invest primarily in securities like Treasury bills, repurchase agreements and agency debt – saw assets rise to $4.89 trillion, a $31.6 billion increase.  Prime funds, which tend to invest in higher-risk assets such as commercial paper, meanwhile, saw assets rise to $994 billion, a $7.32 billion increase. Institutional funds saw a large $33BN inflow and retail funds saw yet another inflow… Source: Bloomberg After a small expansion in the prior week, The Fed’s balance sheet contracted by $47.2BN last week… Source: Bloomberg And for the first time since May of last year, usage of The Fed’s BTFP facility dropped (by $2.5BN to still $165BN), after The Fed crushed the …