Trump can't influence the Federal Reserve, so he resorts to the Treasury Department's "liquidity injection" to keep the market alive

When the Federal Reserve’s policies cannot be directly influenced, the U.S. Treasury is injecting liquidity into the market through more covert but equally effective means. Since the U.S. government shutdown ended on November 12, the balance of the General Account (TGA) has decreased by approximately $160 billion, with a single-week reduction of $78 billion last week, setting a phased record. This kind of “fiscal easing” is becoming an important short-term variable that the market cannot ignore.

What is the U.S. Treasury General Account doing

The key to understanding TGA is: when the account balance decreases, it means the Treasury is releasing money from the “books” into the financial system.

Why is this considered “circumventing the Fed” liquidity injection

The Federal Reserve controls interest rates and its balance sheet, while the Treasury controls the pace of cash flow. The TGA is essentially the Treasury’s checking account at the Fed. When the balance declines, these funds flow back into the banking system, improving short-term liquidity conditions.

This method does not require changing interest rates or making public statements, but can marginally give the market a “breath of relief,” especially during policy-sensitive periods. It is very common.

The market has already given immediate feedback

During the windows of December 2–4 and December 8–10, the TGA showed a clear decline, and market reactions were very direct. Whether it was the price elasticity of risk assets or market sentiment, there was a characteristic of “sudden tightening.”

Such reactions do not mean a trend reversal but are typical liquidity-driven moves, more like “giving the market an adrenaline shot.”

Why it cannot change the big trend

It is important to emphasize that fiscal easing by the Treasury and monetary easing by the Fed are not on the same scale. Changes in TGA mainly affect short-term liquidity rather than long-term financial conditions.

When macro direction is still dominated by interest rates, inflation, and policy expectations, fiscal easing is more about delaying shocks and smoothing volatility rather than re-pricing assets.

But it remains a very practical monitoring indicator

Because it cannot determine the trend, it is more suitable for capturing short-term rhythm. Changes in TGA are among the few liquidity signals that can be quantified and observed in advance.

When you see the market suddenly “strengthening without reason,” the answer is often not in the news but in the changes in the fiscal account balance.

How to use this indicator more reasonably

TGA is better used as a confirmation tool rather than a trading signal. It tells you whether “the market is being fed” rather than “whether to chase or sell.”

Beyond trend judgment, treating it as a liquidity thermometer can help avoid being misled by short-term market movements.

Conclusion

When the Fed cannot be directly influenced, the Treasury becomes another “invisible hand.” The decline of TGA is neither mysterious nor omnipotent, but it does genuinely influence market rhythm.

Truly mature traders do not just focus on interest rate meetings but also incorporate these inconspicuous account changes into their monitoring scope.

Understanding where the water comes from is often more important than guessing where prices are headed.