PBG Analysis – November Edition
U.S. Macro-Liquidity Report
November 11, 2025 — 11:58 AM CST
Current Diagnosis
The U.S. federal government has been in a partial shutdown since October 1, 2025, the longest on record (41 days). The Treasury General Account (TGA) peaked at approximately $950 billion in early November (a historic high outside the COVID-19 period). This TGA level represents a net liquidity drain of roughly $700 billion from the banking system since January 2025.
Main Drivers
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Sharp reduction in federal outlays during the shutdown (payrolls, Supplemental Nutrition Assistance Program (SNAP), subsidies, contracts).
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Tax receipts stable or above expectations (corporate taxes and Q4 withholdings).
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Aggressive T-bill issuance to finance the deficit without spending, accumulating cash at the Fed.
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Fed Quantitative Tightening (QT) still active through November 30 (approx. $20B).
Observed Consequences
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Compressed bank reserves, translating into reduced lending and investment capacity.
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Overnight Reverse Repo Facility (ON RRP) rate at an 18-month low. Funds are increasingly unable to draw from the RRP, and the effects on bank reserves are becoming evident.
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Sustained downward pressure on risk assets: Bitcoin -19% from its September high; Nasdaq -8.7% over the same period.
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Volatility in short rates (SOFR spikes, i.e., the rate at which large banks lend U.S. dollars to each other overnight, using U.S. Treasuries as collateral) and disruption in public services (airport delays, SNAP, VA payments).
Base Post-Shutdown Scenario (Probability > 85% this week)
The Senate approved on November 10 a continuing funding resolution through January 30, 2026. The House will vote between today and tomorrow.
Expected immediate effects upon enactment:
| Component | Estimated magnitude (1–3 months) | Impact on bank reserves |
|---|---|---|
| TGA drawdown | –$300B to –$500B | +$300B to +$500B |
| End of QT (Dec 1) | +$100B–$200B/month | +$200B–$400B (by Q1’26) |
| Net liquidity injected | $500B–$900B | +$700B–$900B total |
Interpretation: Equivalent to an unannounced “QE-light.” Historically, injections of this magnitude have produced +15% to +35% rallies in Bitcoin and +8% to +18% in the Nasdaq over 60–90 days.
Risks and Limitations
| Risk | Probability | Potential impact |
|---|---|---|
| House delay > 7 days | Low (15%) | Prolonged TGA drain, additional volatility |
| Smaller-than-expected TGA drawdown | Medium (35%) | Injection limited to $200B–$300B (moderate rally) |
| November CPI > 3.3% | Medium-High | Fed maintains or increases hawkish tone, capping the rally |
| Exogenous shock (geopolitical, banking) | Low | Overturns the liquidity narrative |
| Fiscal crowding-out effect | Medium | 2026 deficit > $2.2T absorbs private liquidity |
| BTC–Nasdaq correlation 0.82 | High | Without a risk-on rotation in equities, BTC does not lead |
Conclusion
The macro setup becomes highly favorable for risk assets once the shutdown ends (likely within the next 48–72 hours). The combination of TGA drawdown + end of QT constitutes the largest net liquidity injection since 2021, with Bitcoin as the most sensitive asset (per https://insights.glassnode.com/avenir-glassnode-bitcoins-liquidity-profile/ Bitcoin’s liquidity beta is 2.1).
This content is informational only and does not constitute financial advice, an offer, or a solicitation to invest. Cryptoassets are volatile and may result in total loss of capital. Past performance is not indicative of future results. Subject to applicable regulation. Do your own assessment before investing.
