Core Insights - Federal Reserve may end balance sheet reduction in the coming months, but the role of the U.S. Treasury was not mentioned by Powell [1] - The U.S. Treasury is increasing the supply of Treasury bills, necessitating a higher general account balance [1] - The general account balance has been targeted at approximately $850 billion, with expectations to reach at least $900 billion by the next quarterly report on November 3 [1] Group 1 - The Federal Reserve's balance sheet reduction will decrease bank reserves, which are currently around $3 trillion, nearing a "sufficient" level [1] - Barclays strategists indicate that the growth in the Treasury's general account balance consumes reserves, increasing pressure on the Fed to halt balance sheet reduction and eventually expand its balance sheet [1] - The report from October 14 suggests that the Fed will need to expand its balance sheet to address the growth in non-reserve liabilities [1] Group 2 - The U.S. Treasury is accelerating the weekly auction of Treasury bills, with a net supply of $146 billion this month, exceeding expectations by $80 billion [1] - The increase in Treasury bill supply requires the Treasury's general account balance to rise to keep pace with cash flow [1] - According to policy, the general account balance should cover total expenditures and maturing marketable debt over a week [1]