The Federal Reserve Will Continue to Withdraw Liquidity From Dollar Markets

The US treasury can still issue debt for another couple of months outside of emptying their cash balance at the federal reserve. This is a liquidity addition to private banks as private banks will be on the receiving end of the dollar liquidity when the US treasury decides to bring down this cash balance in February and March. Net net, we should still expect liquidity injection over the course of February and March but when we get closer to summer, the net net equation will turn negative for dollar liquidity again,. As long as the federal reserve will continue its quantitative tightening program.