Fed balance sheet hits record high; banks rush on to lending amid near-zero rate


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Fed balance sheet hits record high; banks rush on to lending amid near-zero rate

On Thursday, the 19th of March 2020, the US Federal Reserve had reached an all-time high of $4.7 trillion this week, while a number of Wall St. lenders which could borrow directly from the US Central Bank, had been rushing on to grabbing fresh loans following Central Bank’s efforts to cut interest rate near-zero alongside a pledge to proffer a free-flow of American Dollar in to the market at a discounted rate for up to 84 days in a bid to blunt the financial repercussions of the Coronavirus-led global health crises.

Aside from that, Thursday’s (March 19th) Federal Reserve data had also revealed that the amount of lending from the US Federal Reserve’s ‘discounted borrowing window’ skyrocketed to $28 billion this week compared to a $11 million a week earlier, remarking an immediate response of Fed’s measures to channel more credits in to the US economy.

Meanwhile, referring to the US lenders’ willingness for the “discounted borrowing window” which traditional banks usually avoid and see as a sign of stressed economy, Fed said in a statement on Thursday (March 19th), “The Federal Reserve Board is encouraged by the notable increase in discount window borrowing this week with banks demonstrating a willingness to use the discount window as a source of funding to support the flow of credit to households and businesses.