Unbalanced S to L

 Courtesy of the Fed,  Treasury has been the cash in advance borrower. Now we have deposits exiting faster then cash in advance is redeemed. That gap is pricing variation, and it has gotten larger according as matched analysis, that means the curve will be contracting soon.  A spectral imbalance, loans are not tracking deposits.

The cycles happens because Treasury is not a representative set of independent borrowers. And, further, the Fed has to interpret the intentions of Congress, as they do not manage liquidity, leaving that up to the Fed in a contradictory role.

The Fed took the short cut back, raising rates and reducing balance sheet, both. Short cuts are loops, cycles.