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It’s that time of year again and US bank deposits sure showed it…While money-market funds’ total assets fell over $100BN, on a non-seasonally-adjusted (NSA) basis, total bank deposits crashed by a stunning $258BN as Tax-Day cometh. That is considerably more than the $152BN decline last year but less than the $336BN plunge in 2022…
Source: BloombergThis makes some sense though as the Treasury Cash Balance rose by around the same amount as taxpayers did their duty and paid their ‘fair share’…
Source: BloombergHowever, on a seasonally adjusted (SA) basis (i.e. adjusted by the PhDs for the fact that we get large deposit outflows at this time of year to pay taxes), total deposits dropped $133BN – the biggest weekly plunge (SA) since 9/11!
Source: BloombergExcluding foreign deposits, domestic bank deposits plunged on both an SA (-$119BN: Large banks -$99BN, Small banks -$21BN) and NSA (-$241BN: Large banks -$188BN, Small banks -$53BN) basis…
Source: BloombergFor context, that is the largest weekly drop in SA deposits since 9/11 and the largest NSA deposit drop since April 2022 (Tax Day).Interestingly, despite the deposit dump, loan volumes increased last week with large banks adding $5.8BN and small banks adding $2.5BN…
Source: BloombergAll of which pushed the un-bailed-out ‘Small banks’ back into ‘crisis mode'(red line below constraint absent the $126BN still in the BTFP pot at The Fed which is slowly being unwound)…
Source: BloombergAnd so, with rate cuts off the table – and tapering QT very much back on – we wonder just how much jockeying between Janet (Yellen) and Jerome (Powell) is going on ahead of next week’s QRA and FOMC news…More By This Author:Fed’s Favorite Inflation Indicator Prints Hotter-Than-Expected As Savings Rate PlungesMicrosoft Surges As AI-Growth Drives Across-The-Board BeatSoggy 7Y Auction Prices On The Screws; Foreign Demand Sags Amid Surge In Directs
