US Stock Market: Fed liquidity operations signal calm quarter-end as money markets stay well supplied

US money markets are expected to see smooth quarter-end conditions with no borrowing through the Fed's Standing Repo Facility and minimal inflows into the Overnight Reverse Repo Facility, indicating ample liquidity. The Fed has reduced its Treasury bill purchases from $40 billion to $10 billion per month, with analysts expecting purchases to continue through summer. Fed Chair Kevin Warsh supports reducing the balance sheet, with potential shrinkage of up to $1 trillion from the current $6.7 trillion level.