How to judge this bear market?
1- Bank reserve has been declining since March, and liquidity has tightened
2- Net liquidity = fed total asset - onRRP - TGA Let's look at TGA first. It has remained at the same level since the end of 23, neither increasing nor rising, so I won't pay attention to it for now.
3- onRRP is still falling, but as the total amount becomes smaller, the speed becomes slower, about 30 billion per month. Before March, the decline rate was 180 billion per month, far exceeding the speed of QT, which was the main driving force of the bull market in 23 years. But by March, the total onRRP was only 440 billion, which was not enough to support the continued rapid decline.
4- Fed total assets have been declining, 70 billion per month, and the rapid decline from June to 50 billion is still greater than the decline rate of onRRP.
Standing at the juncture of March, if you are not confused by the increase at that time, you have the opportunity to judge the risk.
Then the subsequent bull and bear markets will mainly depend on when QT slows down further or even stops, which is more important than interest rate cuts.