Net liquidity has rebounded following post-tax fiscal flows, but the broader multi-year downtrend remains unchanged. The current move reflects tactical liquidity release within a structurally declining framework.

This week’s H.4.1 report shows a modest improvement in system liquidity. Bank reserves increased while ON RRP continued to decline, partially offset by a moderate rise in the Treasury General Account. Market behavior continues to reflect volatility repricing and positioning adjustments rather than liquidity contraction.