Demand Wanes for Fed’s Initial Crisis Programs With Market Calm
- Key spreads shrink, prime money funds report steady inflows
- Fed programs seen lifting markets before they opened
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The initial wave of emergency lending programs opened during the coronavirus crisis by the Federal Reserve saw little to no new borrowing last week, a sign of how effective they’ve been at drawing traditional lenders back into U.S. money markets.
Loans outstanding declined $3.7 billion to a combined $80.3 billion in the seven days ending April 22 from two facilities designed to provide liquidity to money market funds and large banks known as primary dealers, according to data released by the Fed on Thursday.