Banks reduced their borrowings from two Federal Reserve backstop lending facilities in the most recent week, a sign that liquidity demand may be stabilizing.
US institutions had a combined $152.6 billion in outstanding borrowings in the week through March 29, compared with $163.9 billion the previous week.
The latest figures suggest efforts by policymakers to stem contagion following a string of bank collapses is working, though banks are still borrowing much more than is typical during periods of low stress.
“After the dust has settled a little bit this week with the banks, today’s report offers some assurance that, at a minimum, things haven’t gotten any worse,” Jefferies economists Thomas Simons and Aneta Markowska wrote in a note to clients.
Source : Reduction in Fed’s Emergency Loans to Banks Indicates Easing Financial Turmoil