Definition
A computed indicator: Fed Balance Sheet minus TGA minus ONRRP. Represents the net liquidity available to the private financial system.
Net Liquidity = WALCL - TGA - RRPONTSYD. This formula captures the three largest levers on system liquidity in a single number. When all three move favorably (Fed expanding, TGA falling, ONRRP draining), net liquidity rises rapidly. The 30-day change in net liquidity has shown a +0.52 correlation with SPX 20-day forward returns since 2020.