With the imminent expiration of The Fed’s bank bailout facility (reminder they were 12-month collateralized term loans), and with The Fed’s reverse repo facility see a massive $128BN in liquidity sucked out of it in the last two days, this week’s excitement over at NYCB again is sure to have seen some depositors question their decisions (but we won’t know about that for a couple of weeks as The Fed needs time to ‘manage’ the data). RRP’s collision with the x-axis is right on schedule… Source: Bloomberg And while The Fed’s balance sheet continues to contract, we do note that the pace of contraction has slowed significantly this year… Source: Bloomberg And at the same time, inflows to money-market funds continued to take total assets to fresh record highs… Source: Bloomberg …as banks saw deposits decline $48BN (SA) last week ($86BN in the last 3 weeks)… Source: Bloomberg On a non-seasonally-adjusted basis, total deposits fell $74BN in the week ending 2/21 (down $206BN in 2024)… Source: Bloomberg And, excluding foreign banks, domestic deposits dropped $46BN …