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The new leakage of liquidity from the general account of the US Treasury (TGA) manufactures waves among market monitors, with some analysts who speculate that this may be a major operator for the main movement of Bitcoin. While the Federal Reserve continues in the quantum tightening program (QT), the latest cash injection in TGA – up to $ 842 billion – sparked a discussion about whether we were witnessing a surreptitious version of quantitative dilution, sometimes referred to as “La QE, QE”
Fed’s “La QE, QE”
in mail Common on X, Macro (Tomasonmarks) presented a detail of how this dynamic is running: “La QE, QE” has officially started. Liquidity injections that could reach $ 842 billion in the public account of the US Treasury this week began. , This quantitative mitigation, but on a temporary basis.
The background of this increase in liquidity is the US debt limit of $ 36 trillion. With the absence of a new debt until a new roof agreement is reached, the cabinet is forced to rely on the money from TGA to cover the obligations of government spending. This offers TGA – 842 billion dollars from Tuesday, February 11 – effectively pumping liquidity into the financial markets.
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According to Tomas, the “train” of TGA began to spend on Wednesday, February 12: “From Fahmy, the official treasury caused by the debt ceiling (TGA) began on Wednesday, February 12 … This train is now in the movement and will not stop until it arrives Legislators to a new debt ceiling agreement.
It is likely that the first part of this process will include about $ 600 billion in injection between February 12 and April 11. After the tax season in April, a temporary renewal of TGA can occur, but until a new ceiling deal is reached, the treasury is supposed to continue spending current cash reserves.
While some observers are climbing in this development as an actual round of QE, Thomas emphasizes that the final net effect depends on at least two through the next FOMC meeting in March. For two months, this is translated into an estimated $ 110 billion to reduce liquidity.
With the issuance of a treasury that exports fewer T-Bells due to the roof restrictions-covered with “T-Bill version”-market funds may have less than short-term government securities for purchase. This scarcity can lead them to stop more cash in the opposite return facility at the Federal Reserve, which effectively drains liquidity from the broader market.
Thomas notes: “This may stimulate the money market boxes to stop the money in Ribo Ajisi in the Federal Reserve, which may lead to pushing this scheme up … The increase in the use of the reverse ribo will be the phrase of the FBI.”
In general, the true scale of the TGA incentive is still uncertain. Last week, net injection of the system was estimated at $ 50 billion, a number that could fluctuate in the coming weeks with the development of QT and the reverse demand to restore the ribo.
Another main piece of the puzzle is the constant political stagnation on the roof of the debt. Despite calls for cooperation between the two parties, divisions within the narrow Republican majority – which have been formed with the broad democratic opposition – are fighting quick horizons.
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Republicans in the House of Representatives have recently launched a plan linking “trillion dollars” in the tax cuts to raise the roof of the debt. However, the passage of the procedure is out of harm, as conservative members deeply object to any extent of debt an increase in the principle. Previous increases usually require support through parties, indicating a long confrontation.
Thomas notes that “this comes on the shoulders of Parliament Speaker Mike Johnson, where he is trying to mobilize legislators behind the plan,” which is widely reflects suspicion about whether adequate sounds can be secured.
Will Bitcoin benefit?
For Bitcoin merchants, this liquidity is often associated with the excessive risk of appetite and the risks – it has historically witnessed upward price movements during periods of loose monetary policy and injection of liquidity. Although the federal reserve did not indicate any immediate stopping to QT, the TGA flood in the near -term cash can still have risk origins, including bitcoin.
Specifically, it can still be seen. However, for the market participants watching the daily clear liquidity measures, the interaction between TGA and QT withdrawals and the use of reverse ribo has become a central story. As the confrontation in Washington continues, the bitcoin area will monitor every increase in liquidity plans at the Federal Reserve – which may lead to the switching of the next large collapse of Bitcoin.
At the time of the press, Bitcoin was traded at $ 96,424.
Distinctive image created with Dall.e, Chart from TradingView.com
