US bank reserves nosedive to $2.8 trillion, crash to 4-year low - analysts say crisis could be near
Published on: Oct. 31, 2025, 9:12 p.m. | Source: The Economic Times
US bank reserves fall to 4-year low as liquidity fears surge. Fresh Fed data shows reserves have plunged to about $2.8 trillion, down from $3.3 trillion earlier this year — the lowest since 2021. Analysts warn the system is nearing scarcity as the Feds quantitative tightening drains cash and Treasury debt issuance pulls liquidity from banks. Funding costs are rising, money-market balances top $1 trillion, and smaller lenders may face stress soon if reserves slide below $2.7 trillion, triggering potential market turmoil.
