This USD Liquidity Index composed of 2 parts, total assets and major liabilities of the Federal Reserve .
There is a certain positive correlation between USD liquidity and risk asset price changes in history.
Suggested that USD Liquidity is mostly determined by the Federal Reserve balance (without leveraged), this index deducts three major liabilities from the total assets (in green color line) of the Federal Reserve . They are the currency in circulation (WCURCIR) in gold color, the Treasury General Account (WTREGEN) in blue color, the Reverse Repo (RRPONTSYD) in red color.
The grey line is the calculation result of the USD Liquidity Index. With it goes up, liquidity increases, vice versa.