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US Funding Markets Flush With Capital as Structural Shifts Unlock Bank Balance Sheets

Major US banks are releasing balance-sheet capacity that is flooding funding markets with liquidity. Wall Street strategists expect this liquidity to persist as structural economic changes unfold. The influx reflects deeper shifts in how financial institutions manage reserves and capital deployment. Retirement account holders are increasingly accessing 401(k) balances as account values fluctuate with market conditions, according to data from major custodians tracking early-2026 activity. Inflation data showing slower-than-anticipated increases—despite oil price pressures—has relieved investors and supported rebounds in equities and fixed-income securities. The combination of released bank capacity and moderate inflation readings is sustaining elevated liquidity levels across funding markets.