US FED / TREASURY LIQUIDITY — WEEKLY MEMO
Week Ending 2026-06-26
Plumbing flips positive: a -$55B TGA drawdown lifted net liquidity +$53B and reserves +$18B, even as risk assets sold off.
URLI Score
+25.75
Mildly supportive
Net Liquidity
+$53.0B
Meaningful injection
Bank Reserves
+$18.1B
Reserve build
TGA Change
-$54.7B
Cash injection
RRP Change
+$0.9B
Cash parked
Fed Regime
Hold
3.50%-3.75%
Treasury Outlook
Neutral
Supportive
Market Bias
RISK ON
Supportive
Executive Conclusion
Supportive
- Net liquidity rose +$53.0B as the $54.7B TGA drawdown more than offset a tiny -$0.8B Fed asset dip and +$0.9B RRP uptick — a sharp reversal of last week's -$163B drain.
- Bank reserves rebounded +$18.1B to $2.95T, recovering part of the prior week's plunge; reserves remain ample.
- Funding markets stayed calm: SOFR-IORB averaged -2.8 bps and SOFR (3.64%) held below IORB with no quarter-end stress.
- TGA hit Treasury's ~$900B end-June target and the calendar model projects a further ~$391B drawdown next week — a potential large liquidity injection if realized.
Restrictive
- Risk assets sold off despite the liquidity improvement: S&P 500 -2.0%, Nasdaq -4.6%, and Bitcoin -5.6% on the week.
- HY credit spreads widened +12 bps (2.66% to 2.78%), the first meaningful credit deterioration in several weeks.
- The hawkish June SEP still stands (median one hike by year-end, PCE 3.6%); the Fed Rate Path remains a -50 drag with no easing in sight.
- Next week's projected TGA drawdown is maturity-driven over a holiday-shortened week; a Q3 bill-issuance rebuild could reverse the injection quickly.
Main Warning
- The week's signal is a divergence: Fed/Treasury plumbing turned clearly liquidity-positive while equities and crypto fell and credit spreads widened. Watch whether the projected ~$391B TGA drawdown materializes next week, the June payrolls print on July 2, and whether risk-asset weakness is a repricing of the hawkish Fed path rather than a liquidity signal.
POSITIVE URLI +25.75 — Mildly supportive.
WEEKLY LIQUIDITY MAP
Liquidity Waterline
Every node is a water tank: the solid fill is this week's level, the dashed line is last week, and the faint line is the 3-month average. Funding sources feed net liquidity, which flows through the risk gate to crypto markets. Fill colour marks liquidity effect, not raw level.
Funding Sources
TGA-$54.7BADD
Fed B/S-$779.0MNEUTRAL
Reserves+$18.1BADD
RRP+$903.0MNEUTRAL
Net Liquidity
US Net Cash+53.0BADD
Risk Gate
Risk AssetsURLI +25.8ADD
Crypto Markets
Crypto Beta$2.27TNEUTRAL
Meme Beta$25BDRAIN
AddDrainWatchNeutralLast week3-month avg
Liquidity tanks update weekly (Fed H.4.1 / FRED · as of Jun 26, 2026). Crypto & meme market cap and read use the weekly report snapshot (CoinGecko · as of Aug 12, 2026). Homepage and latest weekly memo use the same Waterline snapshot. AI-readable: JSON · Markdown.
What Changed This Week
| Item | Previous | Latest | Change | Impact |
|---|---|---|---|---|
| Fed total assets | $6,736.4B | $6,735.6B | -$0.8B (-0.0%) | NEGATIVE |
| Bank reserves | $2,936.4B | $2,954.5B | +$18.1B (+0.6%) | POSITIVE |
| TGA | $956.5B | $901.8B | -$54.7B (-5.7%) | POSITIVE |
| RRP | $335.6B | $336.5B | +$0.9B (+0.3%) | NEGATIVE |
| Fed rate path | — | hold with hike risk | 3.50%-3.75% | NEGATIVE |
| Dollar / yields | — | dollar flat (+0.2%); yields lower (-6 bps) | Broad USD 120.40 (FRED DTWEXBGS, 2026-06-18); prior 120.12 (2026-06-11) | NEUTRAL |
Previous week: 2026-06-19 (H.4.1 weekly levels).
Fed Balance Sheet Detail
| Indicator | Latest | Weekly Change | Read |
|---|---|---|---|
| Fed total assets | $6,735.6B | -$0.8B (-0.0%) | NEGATIVE |
| Securities held outright | $6,452.0B | -$2.4B (-0.0%) | NEGATIVE |
| Treasury securities | $4,488.1B | +$0.8B (+0.0%) | POSITIVE |
| Bank reserves | $2,954.5B | +$18.1B (+0.6%) | POSITIVE |
| Discount window | $7.9B | +$0.3B (+4.0%) | WATCH |
H.4.1 levels in millions of dollars for Wednesday June 24, 2026 (release dated June 25, 2026). WALCL (total assets), WRBWFRBL (bank reserves), WDTGAL (TGA), and WLRRAL (RRP) verified against FRED (FRED date: 2026-06-24). Reserve Bank credit (WRESCRT), securities held outright (WSHOSHO), Treasury securities (WSHOTSL), MBS (WSHOMCB), and primary credit/loans (WLCFLL) verified against FRED for 2026-06-24; Other Fed assets / Main Street facility residual ($603M, +$2M) read from the official H.4.1 release page Table 1.
Net Liquidity Calculation
Net Liquidity Change = Fed Balance Sheet Change - TGA Change - RRP Change
| Component | Weekly Change | Effect | Notes |
|---|---|---|---|
| Fed balance sheet | -$0.8B | NEGATIVE | Balance-sheet growth adds liquidity. |
| TGA | -$54.7B | POSITIVE | TGA up pulls cash into Treasury; TGA down injects it. |
| RRP | +$0.9B | NEGATIVE | RRP up parks cash at the Fed; RRP down releases it. |
| Net liquidity | +$53.0B | MEANINGFUL INJECTION | Sum of the three flows above. |
URLI — US Risk Liquidity Index
URLI = 0.35 x Net Liquidity + 0.20 x Bank Reserves + 0.15 x Fed Rate Path + 0.10 x Treasury Outlook + 0.10 x Funding Stress + 0.10 x Dollar/Yield Pressure
| Component | Weight | Score | Contribution |
|---|---|---|---|
| Net Liquidity | 35% | +75 | +26.25 |
| Bank Reserves | 20% | +30 | +6.00 |
| Fed Rate Path | 15% | -50 | -7.50 |
| Treasury Outlook | 10% | +0 | +0.00 |
| Funding Stress | 10% | +10 | +1.00 |
| Dollar / Yield Pressure | 10% | +0 | +0.00 |
| Metric | Value |
|---|---|
| Weekly URLI | +25.75 |
| 4-week moving average | -11.12 |
| 13-week moving average | -2.54 · 6 of 13 reconstructed (4-week MA is fully live) |
Observed URLI history
| Week | URLI | Net Liquidity | Reserves | TGA | RRP | Read |
|---|---|---|---|---|---|---|
| 2026-06-26 | +25.75 | +$53.0B | +$18.1B | -$54.7B | +$0.9B | MILDLY SUPPORTIVE |
| 2026-06-19 | -66.50 | -$162.7B | -$175.1B | +$155.4B | +$18.3B | NEGATIVE |
| 2026-06-12 | +29.75 | +$67.0B | +$65.8B | -$44.6B | -$8.5B | POSITIVE |
| 2026-06-05 | -33.50 | -$20.9B | -$21.4B | +$3.1B | +$24.9B | NEGATIVE |
| 2026-05-29 | -41.50 | -$28.2B | -$39.7B | +$60.7B | -$41.7B | NEGATIVE |
Show 49 earlier entries
| Week | URLI | Net Liquidity | Reserves | TGA | RRP | Read |
|---|---|---|---|---|---|---|
| 2026-05-22 | -23.50 | -$5.7B | -$10.7B | -$25.4B | +$16.3B | NEGATIVE |
| 2026-05-15 | +31.25 | +$70.7B | +$65.9B | -$55.3B | +$3.7B | POSITIVE |
| 2026-05-08 | +58.50 | +$134.9B | +$132.3B | -$125.3B | -$0.0B | POSITIVE |
| 2026-05-01 | -2.00 | +$14.0B | +$4.6B | -$19.1B | -$2.4B | NEUTRAL |
| 2026-04-24 | -39.25 | -$66.3B | -$65.6B | +$82.7B | -$14.7B | NEGATIVE |
| 2026-04-17 | -51.50 | -$210.5B | -$203.3B | +$227.4B | -$5.0B | NEGATIVE |
| 2026-04-10 | +58.50 | +$119.7B | +$119.1B | -$106.5B | +$5.3B | POSITIVE |
| 2026-04-03 | +21.00 | +$46.6B | +$28.4B | -$33.9B | +$5.5B | POSITIVE |
| 2026-03-27 | +29.00 | +$36.9B | +$37.3B | -$38.4B | +$2.8B | POSITIVE |
| 2026-03-20 | -42.25 | -$66.3B | -$74.3B | +$70.0B | +$5.9B | NEGATIVE |
| 2026-03-13 | +38.25 | +$52.7B | +$59.4B | -$41.2B | +$6.0B | POSITIVE |
| 2026-03-06 | -5.00 | +$16.8B | +$9.3B | +$8.0B | -$9.7B | NEUTRAL |
| 2026-02-27 | +41.25 | +$50.4B | +$44.5B | -$49.9B | -$0.1B | POSITIVE |
| 2026-02-20 | +0.50 | +$4.0B | +$1.5B | -$21.7B | +$8.7B | NEUTRAL |
| 2026-02-13 | +12.00 | +$19.9B | +$21.0B | +$2.8B | -$6.2B | POSITIVE |
| 2026-02-06 | +38.25 | +$63.6B | +$54.6B | -$45.0B | -$0.3B | POSITIVE |
| 2026-01-30 | -36.75 | -$82.3B | -$73.6B | +$81.5B | +$3.8B | NEGATIVE |
| 2026-01-23 | -45.25 | -$96.9B | -$105.2B | +$94.1B | +$5.6B | NEGATIVE |
| 2026-01-16 | +29.00 | +$25.2B | +$38.8B | -$6.5B | -$10.5B | POSITIVE |
| 2026-01-09 | +53.00 | +$156.2B | +$169.6B | -$89.3B | -$133.9B | POSITIVE |
| 2026-01-02 | -61.00 | -$152.6B | -$127.1B | +$71.3B | +$140.7B | NEGATIVE |
| 2025-12-26 | +43.75 | +$95.0B | +$46.9B | -$59.9B | -$10.7B | POSITIVE |
| 2025-12-19 | -30.00 | -$38.7B | -$40.1B | +$55.6B | +$0.7B | NEGATIVE |
| 2025-12-12 | +56.00 | +$107.2B | +$95.6B | -$102.7B | -$1.0B | POSITIVE |
| 2025-12-05 | -26.00 | -$25.7B | -$19.8B | +$8.8B | +$0.2B | NEGATIVE |
| 2025-11-28 | -5.50 | -$6.9B | -$19.5B | -$1.2B | +$5.1B | NEUTRAL |
| 2025-11-21 | +26.00 | +$32.2B | +$34.2B | -$42.3B | -$15.1B | POSITIVE |
| 2025-11-14 | +31.00 | +$37.4B | +$31.4B | +$0.4B | -$30.1B | POSITIVE |
| 2025-11-07 | +7.00 | +$21.8B | +$24.0B | -$41.2B | +$5.1B | NEUTRAL |
| 2025-10-31 | -55.25 | -$94.3B | -$101.7B | +$78.8B | +$13.0B | NEGATIVE |
| 2025-10-24 | -42.25 | -$66.6B | -$58.6B | +$53.1B | +$6.5B | NEGATIVE |
| 2025-10-17 | -24.50 | -$44.3B | -$45.7B | +$57.9B | -$7.9B | NEGATIVE |
| 2025-10-10 | +38.25 | +$58.0B | +$54.3B | -$25.3B | -$28.9B | POSITIVE |
| 2025-10-03 | -34.25 | -$58.2B | -$20.1B | +$61.4B | -$24.5B | NEGATIVE |
| 2025-09-26 | -12.00 | +$11.2B | -$20.7B | -$49.2B | +$37.7B | NEGATIVE |
| 2025-09-19 | -51.50 | -$125.5B | -$130.6B | +$139.6B | -$11.4B | NEGATIVE |
| 2025-09-12 | -2.50 | -$16.0B | -$17.0B | +$5.6B | +$14.2B | NEUTRAL |
| 2025-09-05 | -26.00 | -$43.0B | -$48.9B | +$66.1B | -$24.4B | NEGATIVE |
| 2025-08-29 | -44.25 | -$78.9B | -$80.8B | +$69.7B | -$5.9B | NEGATIVE |
| 2025-08-22 | -29.00 | -$32.7B | -$30.7B | +$10.6B | -$3.1B | NEGATIVE |
| 2025-08-15 | +2.00 | -$4.7B | -$2.0B | +$51.2B | -$43.7B | NEUTRAL |
| 2025-08-08 | +35.00 | +$33.2B | +$30.7B | +$44.9B | -$79.8B | POSITIVE |
| 2025-08-01 | -41.25 | -$59.7B | -$58.7B | +$85.9B | -$41.3B | NEGATIVE |
| 2025-07-25 | -1.50 | -$15.3B | -$16.7B | +$21.5B | -$7.7B | NEUTRAL |
| 2025-07-18 | +23.00 | +$31.4B | +$33.0B | +$1.0B | -$35.1B | POSITIVE |
| 2025-07-11 | +48.25 | +$84.9B | +$85.5B | -$61.2B | -$21.4B | POSITIVE |
| 2025-07-04 | -42.75 | -$87.3B | -$90.8B | +$37.7B | +$47.1B | NEGATIVE |
| 2025-06-27 | +24.50 | +$23.6B | +$24.3B | -$49.3B | +$6.9B | POSITIVE |
| 2025-06-20 | -53.00 | -$104.1B | -$106.7B | +$106.8B | +$1.1B | NEGATIVE |
Observed URLI history covers completed weekly runs. Historical percentile ranking uses URLI-Core: the four data-derived components (Net Liquidity, Bank Reserves, Funding Stress, Dollar/Yield Pressure), representing 75% of URLI weight, ranked against frozen weekly FRED history since 2020 and shown in the distribution gauge above. The two policy-judgment components and 13-week live average are outside this percentile lens.
Forward View
Projected URLI — 2026-07-03 estimate
| Item | Estimate | Bias |
|---|---|---|
| Mechanical midpoint (review only) | +43.50 | PRELIMINARY |
| Backtested URLI range | +43.50 to +43.50 | SATURATED |
| Uncertainty band: net liquidity | $276.7B to $503.1B | WATCH |
| Range note | URLI band saturated; uncertainty is better read as net liquidity $276.7B to $503.1B. | WATCH |
| Confidence | Model backtest cleared: RMSE $113.2B vs naive $142.9B; hit rate 58.0%. Manual review required for calendar-risk flags. | WATCH |
| Backtest gate | RMSE improvement 20.81% | MODEL |
| Component | Projected Change | Method |
|---|---|---|
| Fed balance sheet | +7.8B | Trailing 4-week mean |
| TGA | -391.0B | Legacy gross calendar (pre-M41) |
| RRP | +8.9B | Trailing 4-week mean |
| Net liquidity | +389.9B | Fed BS - TGA - RRP |
Projection track record — current estimator
| Metric | Value | Meaning |
|---|---|---|
| Scored weeks (N) | 2 | Scored since the 2026-07-21 model change |
| Directional hit rate | 1/2 | Projected regime sign matched realized |
| Range containment | 2/2 | Realized URLI inside the displayed ±band |
| Avg absolute error | 53.9 pts | Mean |projected − realized| |
| Point bias | +3.1 pts | Mean projected − realized (− = bearish skew) |
The projection model changed materially on 2026-07-21 (maturing bills are now assumed to roll rather than counted as Treasury cash outflows). The 10 earlier scored weeks are excluded above because they were produced by the previous estimator.
Model track record: last 12 completed projections hit 6/12; mean absolute URLI error 38.25.
Assumptions
- TGA projected from Treasury settlements ($251.0B) minus maturities ($642.0B) for the Thursday-Wednesday week.
- Fed balance sheet change carries forward the trailing 4-week mean: +7.8B.
- RRP change carries forward the trailing 4-week mean: +8.9B.
- Projected bank reserves use net liquidity as a reserve-identity approximation; actual reserves can differ.
- Fed rate path, Treasury outlook, funding stress, and dollar/yield scores are held at this week's actual values.
- The projected $391B TGA drawdown is maturity-driven (holiday-shortened week around July 3); a Q3 bill-issuance rebuild could reverse it quickly.
- Scheduled FOMC risk has passed; next FOMC is July 28-29.
Projection is a model-derived scenario with a measured historical error band, not an observed URLI value. It is replaced by actual H.4.1 / TGA / RRP data in the next weekly run.
Next-week liquidity calendar
| Date | Event | Expected Size | Liquidity Effect | Bias |
|---|---|---|---|---|
| 2026-06-30 | 13-week and 26-week Treasury bill auctions (quarter-end) | Regular weekly bill rollovers | Net cash flow depends on par of maturing bills vs. new issuance; broadly liquidity-neutral at quarter-end | NEUTRAL |
| 2026-07-02 | June Employment Situation (nonfarm payrolls) released early ahead of July 4 holiday | N/A | No direct plumbing effect; a hot print would reinforce the hawkish Fed path and pressure the Fed Rate Path score | WATCH |
| Week of 2026-06-30 | Large projected TGA drawdown: maturities ($642B) exceed settlements ($251B) | Net TGA drawdown of ~$391B projected by calendar-mechanical model | If realized, injects ~$391B of net liquidity into the reserve system over the holiday-shortened week — bullish URLI signal; drives projected URLI to +43.5 | POSITIVE |
| 2026-07-05 | BOE May M4ex money-and-credit release (expected; not yet published as of Jun 26) | N/A | No direct US plumbing effect; updates UK broad money component of GMLCI | WATCH |
| 2026-07-28 | Next FOMC meeting begins (July 28-29, 2026) | N/A | Rate decision; any hike would tighten financial conditions and reduce the Fed Rate Path score | WATCH |
Alerts & Warnings
| Alert | Status | Notes |
|---|---|---|
| Major injection / drain | NEUTRAL | Net liquidity +53.0B; no breach of the +/-$100B threshold. |
| Reserve shock | POSITIVE | Bank reserves +18.1B; inside the +/-$75B shock band. |
| TGA drawdown | POSITIVE | TGA fell -54.7B, injecting liquidity. |
| RRP shock | NEUTRAL | RRP +0.9B; below the $50B shock threshold. |
| Fed rate path | NEGATIVE | No FOMC meeting this week. The prevailing stance is set by the June 16-17, 2026 FOMC (Chair Kevin Warsh's first meeting), which held at 3.50%-3.75% and delivered a hawkish SEP: median year-end 2026 rate of 3.8% (one hike implied), 9 of 18 participants expecting at least one hike, and a PCE inflation projection of 3.6% driven by the Middle East energy supply shock. Forward guidance was dropped. Next FOMC is July 28-29, 2026. |
| Funding stress | POSITIVE | FRED-derived: -2.80 bps avg SOFR-IORB (2026-06-18 to 2026-06-25, 5 business days). SOFR at 3.64% sits marginally below IORB; bank reserves rose +$18.1B to $2.95T and remain ample. No stress signals in repo markets despite quarter-end approaching. |
| Historical significance | POSITIVE | URLI-Core (4 data components, 75% weight) = +33.25 ranks in the 72nd percentile of weeks since 2020 (N=337). |
Market Transmission
| Asset | Bias | Reason |
|---|---|---|
| SPX / QQQ | SUPPORTED | Mildly supportive; index-level liquidity supports multiple expansion. |
| Small caps / breadth | NEUTRAL | Rate-sensitive; needs reserve support and lower yields. |
| BTC / ETH | SUPPORTED | Crypto tracks net liquidity; this week's flow was +$53.0B. |
| High-beta alts | WATCH | Need both a positive URLI trend and BTC leadership to outperform. |
POSITIVE Supportive.
Bull / Base / Bear Scenarios
| Scenario | Liquidity Setup | Market Impact | Confirms / Invalidates |
|---|---|---|---|
| BULL | TGA drawdown resumes; SOMA support continues; yields cool. | Risk assets bid. | Confirms: net liquidity > +$50B. Invalidates: TGA rebuild accelerates. |
| BASE | Flat net liquidity; Treasury supply offsets SOMA. | Choppy, range-bound. | Confirms: stable reserves, calm SOFR. Invalidates: auction stress or USD breakout. |
| BEAR | TGA rebuild + bill supply + higher yields. | Risk-off. | Confirms: TGA spikes with rising yields. Invalidates: TGA drawdown and falling yields. |
Sources & Data Definitions
| Field | Source | Type |
|---|---|---|
| Balance sheet / reserves / RRP / TGA | Federal Reserve H.4.1 | Official |
| Verification series | FRED WALCL / WRBWFRBL / WDTGAL / WLRRAL | Official |
| Fed policy / rate path | FOMC statement & minutes | Official |
| Treasury outlook | Quarterly Refunding Statement | Official |
| Funding stress score | FRED SOFR / IORB — 5-business-day avg SOFR−IORB spread (bps) | Official |
| Dollar/yield score | FRED DTWEXBGS / DGS10 — weekly Δ broad dollar (%) × Δ 10Y yield (bps) | Official |
| Metric | Definition |
|---|---|
| Fed balance sheet | H.4.1 Total assets, weekly point-in-time level. |
| Bank reserves | H.4.1 Table 5 'Other deposits held by depository institutions' (weekly reserve balances). |
| TGA | U.S. Treasury, General Account. TGA down is liquidity positive. |
| RRP | Reverse repurchase agreements. RRP up parks cash at the Fed. |
| Basis | Latest week 2026-06-26; previous week 2026-06-19; H.4.1 levels in $M, displayed in $B. |