To The Moon

The government shutdown is expected to end on November 15th...

Could the market take this opportunity to correct by 10%, before surging again after the government reopens?

Market liquidity has been increasingly tight recently, with the US government shutdown now exceeding the longest in history.

If this continues, it could lead to significant market volatility.

Tight liquidity will first cause a market downturn, with speculative stocks and trending stocks being the first to suffer.

$S&P 500(.SPX)$ $Vanguard S&P 500 ETF(VOO)$ $Invesco QQQ(QQQ)$ $ProShares UltraPro QQQ(TQQQ)$ $Destiny Tech100 Inc(DXYZ)$ $iShares Russell 2000 ETF(IWM)$

The U.S. Treasury's TGA (Treasury General Account) is the government's primary cash account held at the Federal Reserve, used for daily payments, tax administration, and liquidity buffers. Currently (November 4, 2025), the TGA account itself has no technical or operational "problems" (such as system failures, hacking, or inaccessibility), but the government shutdown has indeed triggered discussions about liquidity and market impact.

Current Situation Analysis

• Background of the Government Shutdown:

The U.S. government shutdown has lasted approximately 35 days, primarily due to congressional budget disagreements and the debt ceiling dispute (similar to the historical 2018-2019 shutdown).

During the shutdown, non-essential spending was suspended, but tax revenue and short-term Treasury bond issuance continued, causing the TGA balance to rapidly accumulate to nearly $1 trillion (a surge from the normal tens of billions).

This is equivalent to withdrawing approximately $700 billion in liquidity from the financial markets, similar to the tightening effect of multiple interest rate hikes, putting pressure on risk assets such as stocks and Bitcoin. 15 21

• Manifestations of a "Liquidity Problem":

TGA expansion leads to reduced bank reserves and tightens market liquidity. The Fed recently injected $29.4 billion to alleviate this, but the overall environment remains tight. 18 This is not a TGA account malfunction, but a direct consequence of the shutdown policy: spending freeze amplifies cash hoarding.

• Historical and Normal Volatility:

TGA balances are inherently volatile, affected by the debt ceiling, tax season, and Treasury issuance. In early 2025, TGA was running at a low level due to debt ceiling negotiations, but the shutdown reversed this trend. 5 Potential Impacts and Outlook

• Short-Term:

Continued shutdown will further tighten liquidity and may amplify market volatility. Delayed economic data releases also increase uncertainty. 22 However, the end of the shutdown (expected after congressional negotiations) will trigger rapid TGA spending, equivalent to injecting massive liquidity and supporting a market rebound. 17

• Medium to Long-Term:

As TGA management becomes more normalized, the Treasury may maintain a higher cash buffer to prevent rollover risks (short-term debt rollover). The slowdown in the Fed's balance sheet reduction also buffers the impact. 2. There are no structural problems; they are more of cyclical political events.