The Kobeissi Letter: A new round of liquidity has arrived

Golden Finance reports that on December 16th, The Kobeissi Letter stated 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 at the Federal Reserve. When the account balance declines, funds flow directly into the financial system, boosting liquidity. This is the fourth-largest single-week decrease of the year. Meanwhile, the Federal Reserve plans to purchase approximately $40 billion in government bonds through its reserve management purchase program from December 12 to January 14. Additionally, the Fed will use about $14.4 billion of its mortgage-backed securities (MBS) principal payments to buy government bonds during the same period.