Famed investor Michael Burry warns of weakness in the US banking system, pointing to the Fed’s plan to purchase short-term Treasurys as a sign of trouble. The Fed’s reserve balances have declined to “ample levels,” prompting the central bank to start making “reserve management purchases.” This move, totaling around $40 billion a month, aims to boost liquidity in markets and the banking sector. Burry expresses concern that US Banks are becoming weaker too quickly, relying on Fed support. Stocks surged post-Fed meeting, driven by optimism around the central bank’s plan. Burry remains cautious, favoring cash accounts or money market funds over bank stocks.

Read more at Yahoo Finance: ‘Big Short’ investor Michael Burry says the latest Fed meeting points to trouble in the banking system