Investors added roughly US$105 billion to U.S. money-market funds in the week ending Dec 3 — the largest inflow since early November — highlighting a growing preference for safe, liquid assets in the lead-up to the Fed’s next move. Meanwhile, aggregate U.S. bank deposits remain solid at around US$18.53 trillion (seasonally adjusted, week ending Nov 26), underscoring that the deposit base remains large even as the funding landscape shifts.
Amid funding-market strains and elevated secured-funding costs, a growing chorus of market analysts expects the Fed to start short-term Treasury-bill purchases (RMPs) in early 2026 — a potential reset mechanism aimed at stabilizing liquidity conditions.
At the same time, competitive pressure is emerging from outside traditional banking: stablecoin growth continues to draw regulatory attention (including warnings from the ECB on deposit substitution risk), and a new blockchain-based bank N3XT—backed by cash/short-term Treasuries and offering 24/7 USD payments—has just launched, reflecting a live pivot toward hybrid crypto-native banking models.
Taken together, these developments suggest we are in a transitional period for funding, liquidity, and deposits: while traditional aggregates remain elevated, the composition of liquidity, structural competition from digital-native providers, and changing behavioral preferences (MMFs, stablecoins, 24/7 rails) are reshaping how we might think about ALM, deposit stability, and balance-sheet stress going into 2026.
Arnab Pandey 