*Peak hoarding* Thread - analysis by Sr. Advisor @Brad_Setser. Mar: financial stress re: #COVID19 shock generated unprecedented foreign outflows from Treasury market & unprecedented inflows into US banks. Interbank claims on US banks & non-bank deposits at US banks rose.
Official investors were on net pulling funds out of Treasury market & increasing deposits in US banks (including at Fed). Apr - little chg. *May TIC data*: firm evidence of normalization. Interbank flows into US reversed, generating modest outflows in short-term banking data.
X-border bank claims on US banks are about $200 billion below their peaks in latest data. A portion of Mar inflow in US banks reversed – but even so, foreign deposits & broader claims on US banks remain historically elevated. 
The numbers for non-banks are more complicated – the inflow into US banks clearly has stopped, but there isn’t yet strong evidence of reversal.
deposits in US banks remain $100 billion above their end December 2019 levels. Also true at a more disaggregated level, as *chart* of non-bank claims on US banks by select countries and regions shows.
*Change relative to March*: foreign demand for Treasury bills returned, w/ large increase in private holdings.
LT Treasury sales by ROW more/less stopped. In Jun, reserve growth returned led by Asia. Best predictor of foreign investment in Treasuries is chgs in official reserves
LT Treasury sales by ROW more/less stopped. In Jun, reserve growth returned led by Asia. Best predictor of foreign investment in Treasuries is chgs in official reserves
*Bottom Line*:Deposit data show various forms of hoarding in March & April. **Latest data from May show that PEAK USD HOARDING is behind us**. Funding markets are normalizing globally, & this data point is just another piece of evidence in that direction.
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