In Front-Running Washington’s Yield Ceiling, we provided the order-book playbook for FBTC and FETH under an artificial rate cap. Today, Treasury Secretary Scott Bessent revealed the $400 billion liquidity engine actively funding that ceiling, setting a predictable 6-month clock for crypto’s next leg up (detailed in our 2-stage execution playbook below).
The Federal Reserve is currently running Quantitative Tightening, shrinking its balance sheet by $25 billion to $50 billion per month. Central bank policy is no longer the primary driver of market liquidity.
By tapping the $950 billion Treasury General Account (TGA) to buy back long-term government bonds, Treasury Secretary Scott Bessent is deploying cash directly into the banking system at a pace of $60 billion to $80 billion per month. Fiscal liquidity expansion is now larger than monetary contraction.
Federal Reserve Action: Draining liquidity to fight inflation.
Treasury Department Action: Injecting cash reserves to cap bond yields.
Net Market Result: Systemic liquidity is expanding, overriding QT.
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