Chicago Fed's "Other" Deposits Surge Signals Liquidity Shift

TL;DR;

A $70 billion surge in "other" deposits at the Chicago Fed, driven by CME's new margin rules, has elevated balances to levels unseen since mid-2022. This shift, while indicating increased systemic liquidity, also suggests a drain from the private sector as funds move from banks and money markets into Fed accounts, potentially hastening the end of quantitative tightening.