The impact of the tax season on liquidity is beginning to emerge, and liquidity is starting to tighten in the short term. The H.4.1 document just released by the Federal Reserve shows that the average weekly reserve size of banks in the past week as of April 15th was $3.129 trillion. However, on Wednesday of April 15th, the snapshot of bank reserves had fallen to $2.98 trillion. Correspondingly, the latest TGA account size of the Ministry of Finance has risen to $920 billion, which is equivalent to TGA withdrawing $144.9 billion on April 15th. The impact of the tax season has finally been reflected: previously, TGA was still declining (expenditure release) in early April, but this week it directly turned upward, withdrawing 227.3 billion yuan from reserves within a week, directly leading to a decline in reserves. Although the Federal Reserve's RMP (Reserve Management Purchase) is still being injected as planned, its scale has also slowed down (from April 14th to May 13th, it is expected to purchase $25 billion in short-term bonds, compared to over $40 billion in the previous month), weakening its hedging ability. The Ministry of Finance previously estimated that the peak of TGA from late April to the end of the month would be about 1.025 trillion US dollars (with a fluctuation of 500 US dollars above the peak), and currently 920 billion US dollars, with a remaining pumping space of 100-150 billion US dollars. It is possible that reserves may be further tested around 2.9 trillion next week (the window of maximum pressure). A reserve of less than 3 trillion usually means that the cost of funds in the interbank market may increase, and risky assets (especially assets such as large pancakes that rely mainly on liquidity) are most sensitive. If reserves continue to decline, the liquidity that supports the market in the short term will continue to contract. Attention should be paid to recent risks The previous stage of 'no impact on tax season' has ended, and the next 2-3 weeks will be the window of the most tight liquidity. We will continue to track the TGA real-time data for next week's H.4.1 (released on April 23, data 4/22) and Daily Treasury Statement. At the beginning of March, we discussed liquidity issues: https://((x.com))/qinbafrank/status/2029816341361025505 In September of 2024, we talked about the relationship between the pancake and US dollar liquidity: https://((x.com))/qinbank/status/1831275869892035? s=46&t=k6rimWsEbo2D2tXolYcM-A In March of 2024, we talked about the relationship between the TGA account of the Ministry of Finance and liquidity: https://((x.com))/qinbafrank/status/1792856993948148136? s=46&t=k6rimWsEbo2D2tXolYcM-A