Bank Reserves Fall Second Week, Extend Drop Below $3 Trillion

The US banking system’s reserves, a key factor in the Federal Reserve’s decision to keep shrinking its balance sheet, tumbled for the second straight week further below $3 trillion just as the central bank is set to determine the path for its balance sheet.

Bank reserves fell by about $59 billion to $2.93 trillion in the week through Oct. 22, according to Fed data released on Thursday. That’s the lowest level since the week ended Jan. 1.