Core Insights - The Federal Open Market Committee's meeting minutes from July 29-30 indicate a significant increase in the Treasury General Account, leading to a sustained decline in bank reserves for the first time since the balance sheet reduction began in June 2022 [1] - Participants noted potential for a "further sharp decline" in reserves during key reporting and payment processes, which could exert pressure on the money market [1] - The existing tools of the Federal Reserve can provide additional reserves to maintain the effective federal funds rate within the target range, especially highlighted by the increased usage of the standing repo facility at the end of Q2 [1] Summary by Categories Bank Reserves - A sustained decline in bank reserves is anticipated due to the expected increase in the Treasury General Account and the depletion of overnight reverse repurchase agreement tools [1] - This marks the first continuous decrease in reserves since the balance sheet reduction commenced in June 2022 [1] Money Market Implications - There is a risk of a "further sharp decline" in reserves during critical reporting and payment periods, which could create stress in the money market [1] Federal Reserve Tools - The Federal Reserve has tools available to provide additional reserves and maintain the effective federal funds rate within the target range [1] - The role of the standing repo facility in monetary policy execution has been emphasized, particularly with its increased usage noted at the end of Q2 [1]