Raoul Pal "With U.S. government shutdown ending… liquidity provision will ramp up"

Raoul Pal (Raoul Pal), founder of Real Vision (Real Vision), said he expects market liquidity to expand rapidly after the U.S. government shutdown ended.

On the 14th (local time), Pal said on X (X·formerly Twitter), "As the U.S. government has resumed, spending from the Treasury General Account (TGA) will begin in earnest within days," adding, "This will act as a liquidity-supplying factor over the coming months." He added, "If the U.S. central bank's, the Federal Reserve's (Fed) quantitative tightening (QT) ends next month, the Fed's balance sheet will again expand gradually."

Pal mentioned the dollar could turn weaker in the short term and forecasted that, to prevent a shortage of funds in financial markets at year-end, "the Fed is likely to activate temporary liquidity measures such as short-term lending programs or the standing repo facility (SRF)."

He continued, "These measures could ultimately lead to easing bank regulation (SLR)," and explained, "If banks can buy more government bonds, the amount of liquidity supplied to the market will also increase significantly."

Regarding the crypto (cryptocurrency) market, he predicted, "The market-structure bill, the Clarity Act, will soon enter its final stages."

He emphasized, "The U.S. government's debt must be refinanced, and the government wants to heat up the economy ahead of the midterm elections. A large flow of liquidity will begin soon."