Mosaic Finance
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Fed balance sheet, reverse repo, reserves & net liquidity composite
All values in trillions USD · Net Liquidity = Fed Assets − Reverse Repo − TGA
Net Liquidity = Fed Total Assets (WALCL) − Reverse Repo (RRPONTSYD) − Treasury General Account (WTREGEN). This approximates the amount of dollar liquidity available to the financial system.
When net liquidity expands, risk assets (equities, crypto) tend to rally. When it contracts (QT + rising RRP + TGA refill), markets face headwinds.
The Reverse Repo Facility drains liquidity from the system — money parked here is not circulating. The TGA acts similarly: when Treasury rebuilds its cash balance, it absorbs reserves.
Net liquidity measures how much money is actually flowing through the financial system. The Fed's balance sheet adds liquidity, while the reverse repo facility and Treasury's cash account drain it. When net liquidity is rising, there's more money chasing assets -- stocks, crypto, and bonds tend to go up. When it's falling (the Fed is shrinking its balance sheet or Treasury is hoarding cash), markets face headwinds. It's like tracking the "tide" that lifts or sinks all boats.