Definitions
Quick definitions for 22 key terms in dollar-liquidity analysis. Click any term for a detailed explanation.
Term
A market state where investors prefer growth and higher-beta assets as liquidity and confidence improve.
Term
A defensive market state where investors shift toward cash, quality bonds, and lower-volatility assets.
Term
The US Treasury's primary cash balance held at the Federal Reserve. Rising TGA drains liquidity from the private sector; falling TGA injects it.
Term
A Fed facility where institutions park excess cash overnight. DLI treats ON RRP as a conditional liquidity-buffer transition signal: recent large depletion can tighten the score, while an already depleted and stable balance is dormant.
Term
A normalized measure showing how far a current value is from its rolling baseline. Used as one of several display formats; the DLI composite itself uses percentile-rank aggregation.
Term
Shows where the current reading stands within a historical distribution window (e.g., 5 years).
Term
Total financial assets held by the Federal Reserve (WALCL), including Treasuries and MBS. Expansion = more liquidity; contraction = less.
Term
A monetary policy tool where the central bank buys financial assets to inject reserves and lower long-term interest rates.
Term
The reverse of QE — the central bank reduces its balance sheet by letting bonds mature without replacement, draining liquidity.
Term
The benchmark rate for overnight loans collateralized by US Treasuries. Replaced LIBOR as the primary USD reference rate.
Term
The rate the Fed pays banks on reserves held at the central bank. Acts as the primary tool for implementing the federal funds rate target.
Term
A Fed backstop facility that provides overnight repo funding to primary dealers and eligible banks, acting as a ceiling for repo rates.
Term
A computed indicator: Fed Balance Sheet minus TGA minus ONRRP. Represents the net liquidity available to the private financial system.
Term
The broad US money supply measure including cash, checking deposits, savings, and money market funds. M2 growth fuels asset prices; contraction creates headwinds.
Term
The ratio of commercial bank cash assets to total assets. Measures how much liquidity banks are holding in reserve.
Term
The CBOE Volatility Index measures expected 30-day S&P 500 volatility from options prices. Often called the "fear gauge."
Term
The option-adjusted yield spread between junk bonds and Treasuries. Wider spreads signal credit stress; tighter spreads signal confidence.
Term
The yield on 10-year Treasury Inflation-Protected Securities — the "true" cost of borrowing after adjusting for expected inflation.
Term
A trade-weighted index measuring the USD against a broad basket of currencies. A stronger dollar typically tightens global liquidity.
Term
One hundredth of a percentage point (0.01%). Used to express changes in interest rates and spreads.
Term
A graph plotting bond yields across different maturities. The shape (normal, flat, inverted) signals market expectations about growth and policy.
Term
A single composite score classifying dollar liquidity as Loose, Neutral, or Tight, built by aggregating 10 scored indicators across 4 groups via a CISS-style quadratic form with rolling 5-year percentile thresholds.