Liquidity Boost Triggers Financial Debate

A recent influx of nearly $500 billion into the financial system has sparked debate, driven by declining funds in the U.S. Treasury General Account (TGA). This decline is attributed to the debt ceiling, which restricts the Treasury’s ability to issue new bonds, forcing it to draw from the TGA for expenditures. This injection of liquidity resembles the effects of quantitative easing. However, surprisingly, both equity and cryptocurrency markets haven’t reacted significantly to this cash influx, as anticipated.