Excess reserves start their move

Note the drop in excess reserves and the rise in Treasuries held?  This is QE in action.  It is an interest deduction for government via the seigniorage channel.

The effect is at the very end, the green line bending up, the blue/red bending down.  That adjustment likely provided some funding for the repo market, but the cost was a general reduction in rates, across the curve.

It cannot last. This is still a net transfer of liquidity to government from the private sector, crowding out.  We will enter the sub-2% growth regime, maybe the permanent doldrums. But it is a spiral, each time the Fed moves liquidity from private sector to public, tax income drops more, and government has to revisit the issue again.