The Kobeissi Letter: A New Round of Liquidity Has Arrived
2025-12-16 05:20:54
On December 16, The Kobeissi Letter posted that a new round of liquidity has arrived. Last week, the US Treasury General Account (TGA) decreased by $78 billion, marking the largest single-week liquidity injection since June. The TGA is the US government's main cash account with the Federal Reserve. When the account balance decreases, funds will flow directly into the financial system, thus boosting liquidity. This is the fourth largest single-week decrease this year. Meanwhile, the Federal Reserve plans to buy about $40 billion of Treasury bonds through the Reserve Management Purchase Program between December 12 and January 14. In addition, the Federal Reserve will also use about $14.40 billion of principal payments from its mortgage-backed securities (MBS) to buy Treasury bonds during the same period.
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