The Federal Reserve is reducing its RMP reserve management purchases (buying short-term bonds to expand its balance sheet). Looking at the announcement from the New York Fed, the monthly bond purchase scale of the Federal Reserve will be reduced by nearly 40% in the next month (April 14-May 13), from the previous monthly purchase of $40 billion in short-term bonds to $25 billion per month. It is highly likely that this pace will continue thereafter. At the end of March, bank reserves fell below $3 trillion but did not continue to decline. In early April, they turned around and reached $3.116 trillion as of April 8th. Previously, here was https://(x.com)/qinbafrank/status/2029816341361025505? S=46&t=k6rimWSEbo2D2TXolYcM-A has discussed in detail the relationship between the large pie and US dollar liquidity, especially bank reserves. As long as bank reserves continue to rise, the large pie will naturally continue to strengthen. The main reason for the increase in bank reserves in early April was also due to the strong release of TGA by the Ministry of Finance, which decreased by nearly $100 billion in a single week, driving an increase of $100 billion in bank reserves. The reason here is that before April 8th, there were more tax refunds, social security/wage expenditures, government possible early expenditures (wages, benefits, infrastructure or other seasonal payments), or debt management/policy factors that proactively kept TGA at a lower level. The outflow of TGA, such as regular government expenditures, exceeds the inflow, resulting in a net decrease in TGA. Will the tax season still have an impact on liquidity? When will it be reflected, the key point is from the second half to next week: April 15th is the deadline for individual/corporate tax reporting in the United States, and large-scale tax payments are usually concentrated in mid to late April (especially from the days after April 15th to the end of the month). The Ministry of Finance's February quarterly refinancing statement had expected TGA to peak at around 1.025 trillion yuan (± 50 billion yuan) by the end of April. Currently, $748 billion is still far below the target, indicating that there is still significant room for further growth in the future The increase in TGA during the tax season and the ability of the Ministry of Finance to continue spending during the same period depend on the hedging effect. The current RMP pace has slowed down (with only 25 billion RMP left in this cycle), and the hedging ability is weaker than in March. If TGA really rebuilds quickly as expected, the tightening pressure on liquidity will be significantly greater than last week At that time, reserves may quickly fall back, and the degree of net withdrawal (in the range of 100-200 billion yuan) depends on the impact of RMP and TGA expenditures. By continuing to monitor the weekly H.4.1 (next release of April 15th data on April 16th) and Daily Treasury Statement, we can see the turning point in real time. After May, TGA usually experiences a gradual decline in expenditure and a rebound in liquidity. From an overall personal perspective: The decline in liquidity is putting downward pressure on the market; An upward rebound in liquidity is a positive sign for the overall trend of the market. Here is https://(x.com)/qinbank/status/2029816341361025505? S=46&t=k6rimWSEbo2D2TXolYcM-A has a large pie and dollar liquidity framework that I have been sorting out for 24 years.