Back

Borrowing From Fed Emergency Tool Likely Jumped Before Rate Hike

Borrowing from a Federal Reserve emergency lending program rose to a fresh record, just before the central bank raised the facility’s interest rate to stop financial institutions from taking advantage and arbitraging on its attractive terms.

Demand for the Bank Term Funding Program rose approximately $6.3 billion in the week through Wednesday, Jan. 24 to an all-time high of $167.8 billion, data from the Fed showed. Borrowing has jumped by more than $50 billion since mid-November after the program’s rate increasingly fell below the rate at which institutions could earn money by parking reserves at the Fed.


Source link

Wealthfargo
Wealthfargo

Leave a Reply

Your email address will not be published. Required fields are marked *

We use cookies to give you the best experience. Cookie Policy