Look at all that spare cash sitting idle at the Fed thanks to its increase of interest paid on excess reserve balances on November 5th.
Marc Ostwald, analyst at Monument Securities says:
These free reserves may all have been due to the Fed’s de facto quantitative easing, more than well evidenced by a further $240bn surge in the Monetary Base, but there is no point in banks keeping it under their mattresses - doubtless finding its way into Treasuries ahead of financial sector’s year end at the end of month, but eventually set to find a home elsewhere.
Related links:
M3, where art though? - FT Alphaville
