We need to talk about Fed liabilities

Quantitative tightening has triggered a reserves flight from US commercial banks to money-market funds. Now what?

The following article appeared in FT’s Alphaville on 1st July 2022. This version includes a clarification/adjustment to the view on how the shift in reserves is occurring.

Is the crypto blow-up of any real-world consequence? Will a real banker ever lead a major central bank again? There are a number of pressing, unanswered questions. Here’s another: as t…