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Below is a chart and brief excerpt from today’s Market Situation Report written by Tier 1 Alpha. If you’re interested in learning more about the Hedgeye-Tier 1 Alpha partnership, there’s more information here. |
We haven’t presented Janet Yellen’s checking account for some time. As of June 7th, the Treasury General Account (TGA) had fallen to a mere $44 billion. Since then, Yellen has steered it back to a healthier $668 billion, despite tax receipts dropping by 10.77% from Q2 of 2022. This means that, compared to Q2 of 2022, the government brought in $336 billion less in Q2 of 2023.
It’s an oversimplification but remember what inflows to the TGA imply. When large inflows occur, they can drain reserves from the banking system. This is because when taxpayers or institutions make payments to the Treasury, the money typically comes from bank accounts. As these funds move to the TGA, they are removed from the banking system, which can reduce the amount of money banks have on hand for lending or other operations.
With the money supply shrinking and tax receipts falling, the TGA has benefited from the US debt continuing to climb at an accelerating rate. In the past 19 days, the US debt has risen by a tick over $500 billion. Total debt now stands at $33.521 trillion. This means $28 billion a day added over the 19 days or $1.2 billion an hour. That equates to $1 trillion in 45 days.
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Learn more about the Market Situation Report written by Tier 1 Alpha. |
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