Images By Tang Ming Tung/DigitalVision via Getty Images This article aims to examine the US sectoral flows for June 2024 and assess the likely impact on markets as we advance into July 2024. This is important as a change in the fiscal flow rate has an approximate one-month lagged effect on asset markets and is a useful investment forecasting tool. Other macro-fiscal flows can point to events months or years ahead.
The table below shows the sectoral balances for the US, which are produced from the national accounts. US Treasury There was a positive private sector result for June that just ended but nothing special. Last month should have been a rising stock market based on the strong fiscal flows and indeed that was the case.
This month, the flows are not nearly half as strong but are still positive and point to flat to weakly rising markets. In June 2024, the domestic private sector recorded a surplus of $147B. This is a positive result for asset markets, as financial balances in the private sector have risen by this much.
From the table, one can see that the $147 billion private domestic sector funds surplus came from a moderate $79 billion injection of funds by the federal government (and this includes the new injection channel from the Fed of around $6B from interest on reserves that went directly into the banking sector), less the -$79B billion that flowed out of the private domestic sector and into foreign bank accounts at the Fed (the external sector X) in return for im.