US Bank Deposits Soar Back To Pre-SVB Levels, Reserves Decouple From Stocks

Money-market fund total assets jumped over $70BN last week to a new record high above $6.11TN…

Source: Bloomberg

And, as the chart above shows, the broad trend for bank deposits has been positive (slow, but positive), slowly returning to pre-SVB levels. And talking of SVB, in the three weeks since the Fed’s bailout facility was terminated (remember these are 12-month term loans), the Bank Term Loan Facility has shrunk by $37BN, erasing most of the arb-driven rise in the fund – but still holding at $130BN that banks are using to fill holes in their balance sheets….

Source: Bloomberg

On a seasonally-adjusted basis, total bank deposits exploded higher by $77BN (the fifth straight weekly increase in deposits), back to pre-SVB levels…

Source: Bloomberg

Non-seasonally-adjusted deposits were even more impressive, jumping $114BN to the highest since Jan 2023…

Source: Bloomberg

Excluding foreign deposits, domestic bank deposits rose $81BN SA (Large banks +$69BN, Small banks +$12BN); while NSA deposits rose $130BN (Large banks +$103BN, Small banks +27BN)…

Source: Bloomberg

On the other side of the ledger, loan volumes rose overall but Large banks saw volumes shrink by $1.5BN (odd given the massive deposit inflow), while Small bank loan volumes rose $9.6BN…

Source: Bloomberg

Meanwhile, bank reserves at The Fed are falling significantly, massively divergent from US equity market cap once again…

Source: Bloomberg

Which happens first? Banks start piling reserves back in or stocks falter?