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Inside the FOMC's New Liquidity Tools for Stressed Banks
Season 2
Episode 61
Published 3 weeks, 1 day ago
Description
With the Fed holding rates steady at 3.63% and commercial real estate distress deepening, the FOMC is quietly rolling out a new standing repo facility designed to prevent a repeat of March 2023. Lucas and Luna break down how the facility works, why it targets smaller banks holding underwater CRE loans, and what Fed Chair Kevin Warsh signaled in his first meeting about the central bank's willingness to lend. They also examine the Bank of England's rate hold at 3.75% and what that means for dollar liquidity globally. If you've wondered why the Fed is building a new lending safety net even as inflation remains above target, this episode gives you the mechanics and the politics behind it.