Water, Water, Every Where

Treasury debt issuance, rather than Federal Reserve policy, is presented as the main driver of dollar liquidity, and draining the Fed's Reverse Repo Program (RRP) is said to lift risk assets such as Bitcoin. A Treasury Borrowing Advisory Committee slide is cited as stating that RRP balances drained as money funds shifted nearly one-for-one into T-bills over 2023-24. The Treasury's Q3 2024 refunding announcement includes $271bn of T-bill issuance, and a $30bn buyback program is said to raise RRP outflows to $301bn.