This week, the Federal Reserve's balance sheet contracted by $15.2 billion, bringing it to approximately $7.3 trillion. Meanwhile, the Treasury General Account (TGA) increased by $6 billion to $716 billion, following a $4 billion rise the previous week. Reverse repo facility participation also dropped by $37 billion, settling at $459 billion as of May 29th. Overall, liquidity has decreased to $6.128 trillion.

However, there is positive news on the horizon. The U.S. money supply (M2) is showing signs of growth for the first time in a while. This development, alongside China's monetary policies and European debt monetization efforts, suggests a potential rise in global liquidity, which could drive asset prices upward. The Cantillon-story will see another lovely chapter....