Which indicators will sound the alarm first if US dollar liquidity encounters problems? [Cheng Tan Masterclass 4.3]

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Broad liquidity tells us whether overall funds are tight, but to figure out “who exactly is short of money and why,” we need to look at narrow indicators.

The repo market, commercial paper, discount window, SRF, FX swap basis, TGA, primary dealers’ balance sheets…

Each market and instrument tells a different story.

In 2023, after the collapse of Silicon Valley Bank, small and medium banks desperately borrowed funds, but the dealers’ SRF remained unmoved—the contagion between different markets is far less than generally imagined.

In Q4 2025, the repo rate will spike mainly because “the pool doesn’t have enough water” (balance sheet shrinkage reaches its limit), only a small part comes from “the pipe isn’t wide enough” (regulatory constraints).

In this session, Cheng Tan, founder of Tantu Macro, will systematically break down:

Onshore markets: SOFR, commercial paper, discount window, SRF, bank reserves and deposits;

Offshore markets: FX swap basis, central bank currency swaps, FIMA facility.

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