Bottom Line: The Fed's balance sheet evolved as expected through yesterday's close. Net US Dollar liquidity fell modestly, less than in the prior week. Barring any sudden shocks, the average trajectory of Fed liquidity should be tighter for the next several quarters, probably through year-end. The Treasury continues to restore its general account (TGA) balance at the Fed, likely building it to 5-700 Billion, about $200 Billion above this week's balance.
