Here’s some good news.
The banking sector has decreased its borrowing from the emergency fed fund window for the third straight week. On the week ended August 19, it sat at $30.7 billion. Now, it’s $30 billion.
As you recall, this window is for financial institutions that cannot get short term loans anywhere else, and currently sits at 0.50%. With the number going down, it means that the economy is getting healthier as banks can get money elsewhere.
Unfortunately, the names of the financial institutions that borrow from this window remains anonymous despite pressure from congress to release their names. Ben Bernanke insist that making the names public would undermine this program and risk the potential on a run on the banks.
On related news, the Fed increase its holdings of mortgage backed securities issued by Fannie Mae and Freddie Mac to $624.3 billion, up from $607 billion a week earlier in an effort to keep mortgage rates low. However, the 30 year fixed rate still went up to 5.14 percent this week, up 0.02 percent from a few days ago.
As inflationary pressures mount, it will be harder and hard to keep rates low so the Fed has a tough job ahead. Good luck Ben. We sincerely hope you succeed in recovering our economy.
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“Good luck Ben. We sincerely hope you succeed in recovering our economy.”
Where I have been able to read about this?