BREAKING: Bank reserves at the Fed dropped -59 billion last week to 2.93 trillion, the 2nd-lowest since January 2023. This nearly matches the 2023 low of 2.93 trillion, just before the regional banking crisis. Reserves are now on track for their 3rd consecutive monthly decline. This comes as the Treasury increases debt issuances to rebuild its cash balance following the debt ceiling increase in July, draining liquidity from the banking system. US bank reserves will be a key factor in the Fed’s decision on whether to continue shrinking its balance sheet (QT) at the Wednesday's meeting. Is the Fed done reducing its balance sheet?(The Kobeissi Letter)