US Bank Reserves Sink Further to Five-Year Low at $2.8 Trillion

The US banking system’s reserves, a key factor in the Federal Reserve’s decision to keep unwinding its balance sheet, tumbled for the third straight week dropping to the lowest level in more than five years, just as the central bank said this week it will stop the runoff after stress signals in money markets intensified.

Bank reserves fell by about $102 billion to $2.8 trillion in the week through Oct. 29, according to Fed data released on Thursday. That’s the lowest level since September 2020 and the biggest decline in just over a month.

The drop comes as the ...