Rashad Ahmed brings my consideration to the next:
Supply: Ahmed through FRED.
“The H.8 information is up to date by means of March 15 and the info exhibits fairly starkly the “run” on small banks in black. “Different deposits” are principally proxying liquid demand deposits (whole deposits much less giant time-deposits). “Borrowings” proxies for banks drawing credit score from the likes of FHLB and Fed.”
Not solely are funds shifting places, they’re shifting out of deposits, as identified by Torsten Slok at Apollo in the present day.
“The divergence between the Fed funds charge and rates of interest on checking accounts is the basic purpose why cash is being moved out of financial institution deposits and into higher-yielding investments, together with cash market accounts, see charts under. Larger charges as a supply of instability for deposits and Treasury holdings is extremely uncommon in comparison with earlier banking crises, the place the supply of instability has sometimes been credit score losses placing downward stress on the illiquid aspect of banks’ steadiness sheets.”