I think thats all accurate. Treasuries are no different than dollars. Now banks can get into trouble with their reserves of Treasuries if they are underwater on them but that generally happens during a rate hiking cycle. The recent bank loan losses forcing them to the SRF and RRF are from fraudulent loans, from collateral that was non-existent. Its difficult to get a full grasp on monetary/regulatory policy. One thing I have read differing on defaults is defaults aren’t the item to watch for these credit/liquidity issues but the forced selling of those banks due to the losses. But even that is a question of does the dog wag the tail or the tail wag the dog. I also could be wrong, have only begun learning this last year.

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And the TGA is waiting to deploy that cash once the shutdown is over. I was surprised the Fed still wanted to wait before restarting QE. Those drawdowns on RRF and SRF weren’t great to see outside quarterly end rebalancing.

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