Fed Net Liquidity [Premium] [by Golman Armi]

This indicator visualizes the USD Net Liquidity injected into the financial system by the Federal Reserve.
It is a fundamental macro-economic tool essential for understanding the underlying "fuel" driving risk assets such as the S&P 500 (SPX), Nasdaq (NDX), and Bitcoin (BTC).

Unlike many other liquidity scripts that incorrectly use Commercial Bank Assets (USCBBS), this script uses the Federal Reserve Total Assets (WALCL) to provide a mathematically accurate representation of Central Bank liquidity.

How It Works (The Formula)

Net Liquidity represents the actual cash available to the banking system for investment after government liabilities are subtracted. The formula used is:

NetLiquidity=WALCL−TGA−RRP

Where:

WALCL (Fed Balance Sheet): The total assets held by the Federal Reserve (The source of money printing).

TGA (Treasury General Account - WTREGEN): The checking account of the US Government. When the TGA goes up, money is removed from the economy; when it goes down, money is spent into the economy.

RRP (Reverse Repo - RRPONTTLD): Cash parked by banks and money market funds at the Fed overnight. A rise in RRP removes liquidity from the markets.

Features

Accurate Data Sourcing: Pulls daily data directly from FRED (Federal Reserve Economic Data).

Unit Correction: Automatically adjusts conflicting units (Millions vs Billions) from TradingView data feeds to output a correct value in Trillions of Dollars.

Trend Cloud: Features a smoothing EMA (Exponential Moving Average) with a color-coded cloud to easily identify the macro trend (Green for expansion, Red for contraction).

How to Use

Trend Correlation:

Rising Line (Green): Liquidity is expanding. Historically, this supports bullish trends in stocks and crypto.

Falling Line (Red): Liquidity is being drained (QT or TGA refill). This often leads to volatility or bearish trends in risk assets.

Divergences (The most powerful signal):

If the S&P 500 or Bitcoin makes a New High, but Net Liquidity makes a Lower High, it indicates a "hollow rally" lacking fundamental support, often preceding a correction.

Disclaimer

This tool is for educational purposes and macro-economic analysis only. It is not financial advice.