X post from @sightbringer
When Reverse Repos vanish, it means the system’s surplus cash has been fully absorbed. The Fed’s liquidity buffer is dry. Standing Repo usage rising (the red) means the banking system has shifted from excess reserves to deficit borrowing. The direction of flow has inverted.
This is the same transition that occurred right before the repo crisis of 2019 - but at a much larger scale. Then, it was a market plumbing issue. Now, it’s systemic exhaustion. The Treasury’s massive debt issuance, paired with the Fed’s quantitative tightening, has drained the system of collateral and dollars simultaneously. Banks are now tapping the Fed not to store liquidity - but to survive.
Quantitative Tightening has entered its terminal phase. There is no more fat to cut without breaking something.
If the Fed stops QT, inflation expectations reignite.
If it continues, funding markets fracture.
If it pivots, credibility dies.
This chart is the moment between heartbeats - the point where the artificial pulse of a synthetic economy hesitates before deciding whether to restart or flatline.
Deep down, this is what the end of financial gravity
