New weekly figures on US deposits are in, showing that Americans are now increasing the amount of cash they have in the traditional banking system.
In the past week, depositors added a total of $86.58 billion, according to new figures from the Federal Reserve Economic Data (FRED) system.
That’s a significant shift from the previous week, when depositors withdrew about $30 billion from their bank accounts.
US banks now have a total of $17.23 trillion in deposits, down from $18.10 trillion a year ago.
A new report from the Federal Deposit Insurance Corporation (FDIC) shows that Americans withdrew $472 billion in the first quarter of 2023.
Most of the money came from uninsured deposits as customers reduced the risk of holding more than $250,000 per depositor, per insured bank, for each account ownership category.
Money market funds are on the receiving end of much of the cash that has left the banking system as investors seek safety and returns.
As the first quarter drew to a close, assets held by money market funds rose to $5.6 trillion, according to Crane data. It is the highest number ever recorded.
On Wednesday, JPMorgan CEO Jamie Dimon conveyed an optimistic view of the US banks as a whole.
Compared to the financial meltdown of 2008, Dimon says you are “nothing like that leverage”[ads1]; in the system this time.
Dimon says he believes the banking system is healthy, although a “couple of banks” are “offsides” in terms of their exposure to sharp interest rate hikes.
– The private companies are actually in very good shape. The banking system is in pretty good shape.
You’ve seen regional banks just report really good numbers. The deposits did not end as people talk about.”
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