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U.S. Reopening Puts Liquidity Mechanics in Focus as Fed Ends QT Dec. 1

Raoul Pal flags imminent TGA outflows as a potential tailwind for risk assets.

Overview

  • President Trump signed the funding bill on Nov. 13 to end the 43‑day shutdown, and SEC and CFTC staff returned to work with significant ETF and IPO backlogs.
  • The Federal Reserve has confirmed quantitative tightening will stop on Dec. 1 with reinvestment to follow, and policymakers remain split ahead of the Dec. 10 rate decision.
  • Raoul Pal expects Treasury General Account drawdowns to begin within days, continue for months, and likely weigh on the dollar.
  • He also points to possible term funding and expanded Standing Repo Facility operations to avert a year‑end funding squeeze, presenting these as anticipated measures rather than confirmed actions.
  • Crypto prices fell despite the reopening, with Bitcoin below $100,000 and total market cap around $3.24 trillion, while the CLARITY Act awaits Senate action and Michael Selig’s CFTC nomination advances.