Treasury cash lifts TGA, trims reserves $77.6B; Aug. 5 financing

Weekly-average reserve balances averaged $2.98457 trillion for the week ended July 29, down from $3.062149 trillion the prior week, according to the Federal Reserve H.4.1 report. Over the same comparison, the Treasury General Account at the Fed rose to $910.776 billion from $829.623 billion. A single-day snapshot on July 29 showed $2.944541 trillion in reserves and $970.442 billion in the TGA.

The Treasury raised its end-September cash estimate to about $950 billion, a $68 billion headline increase from the May baseline. Excluding a $19 billion higher starting balance, the revision amounts to roughly $87 billion and is driven mainly by changes in projected net cash flows.

The Treasury will publish detailed third-quarter financing parameters at 8:30 a.m. on Aug. 5. That package will set auction sizes, the split between short-term bills and longer-dated coupon debt, and the buyback schedule. A heavier allocation to bills increases issuance of short-term paper; the mix of buyers and their funding methods will influence how pressure flows into bank reserves.

Federal Reserve operations also affect where Treasury cash lands. The New York Fed’s overnight reverse-repo operation accepted $2.127 billion from four counterparties on Aug. 3. For the week ended July 29 the Fed’s reverse-repo average was $343.947 billion, with $342.803 billion held in foreign official and international accounts, a separate category from domestic counterparties.

The Treasury’s borrowing figures track net borrowing and exclude certain SOMA auction add-on rollovers while including financing related to SOMA redemptions; gross issuance and net borrowing can therefore differ.

SOMA Manager Roberto Perli described reserve levels as ample and warned that heavy net bill issuance in July and August could tighten money markets. He said reserve-management purchases could be adjusted if conditions change.

Market participants will compare the Aug. 5 financing map and post-settlement H.4.1 reserve balances to determine how much pressure from Treasury cash reaches funding markets and risk-sensitive assets, including Bitcoin.